Robert Besser
22 Feb 2025, 09:31 GMT+10
LONDON, U.K.: A judge has approved an emergency financial plan to prevent Britain's largest water company, Thames Water, from collapsing, avoiding a potential government takeover.
The High Court ruling allows Thames Water to secure 3 billion pounds ($3.8 billion) in rescue loans, ensuring the company remains operational as it faces a severe cash shortfall. Without the funding, the company was projected to run out of money the next month, which could have forced temporary government control.
Justice Thomas Leech ruled that restructuring was in the public's best interest, stating, "There is a public policy in favor of rescuing the Thames Water Group and giving the market a chance to agree to a permanent restructuring plan before the government is forced to fund a special administrator."
While the decision prevents immediate insolvency, Leech granted permission to appeal to a smaller group of creditors and a lawmaker who had been pushing for a government takeover.
Thames Water Chairman Adrian Montague welcomed the ruling, calling it a "significant milestone" in stabilizing the company's finances. However, critics argue that the company's financial troubles stem from years of mismanagement, excessive executive pay, and shareholder dividends while failing to invest in infrastructure.
Public frustration with Thames Water has been mounting, particularly over sewage spills in rivers and coastal areas. "This national scandal is a disaster for Thames Water billpayers and the environment," said Charles Watson, chairman of environmental group River Action. "The decision saddles customers with billions in junk-rated debt while executives, investors, and shareholders escape responsibility."
Thames Water claims that regulators kept consumer bills too low for too long, preventing necessary infrastructure improvements. In December, industry regulator Ofwat approved a 35 percent increase in Thames Water's charges over the next five years. The company argued that a 53 percent rise was needed to attract investors and fund crucial projects.
Leech acknowledged concerns about the high cost of the bailout, including an interest rate of 9.75 percent, stating, "The costs of finance and adviser fees in the present case are very high. Indeed, they might be described as eye-watering."
Despite the judge's approval, critics remain skeptical. Liberal Democrat lawmaker Charlie Maynard, who had pushed for a government takeover, said he plans to appeal. "This restructuring is simply throwing good money after bad," Maynard said. "The money from our bills which is being spent on interest repayments is desperately needed to repair water infrastructure, improve customer service, and clean up our rivers."
Get a daily dose of San Jose Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to San Jose Sun.
More InformationDUBLIN, Ireland: The NFL will hold its first-ever regular-season game in Dublin in 2025, marking another step in the league's global...
(Photo credit: Joseph Maiorana-Imagn Images) The Los Angeles Kings and the Utah Hockey Club are both expected to welcome back a key...
(Photo credit: Kevin Sousa-Imagn Images) Tyler Herro scored 28 points and dished out seven assists as the visiting Miami Heat defeated...
(Photo credit: Mike Watters-Imagn Images) Desmond Bane hit a tiebreaking foul shot with 45.2 seconds left, and the visiting Memphis...
(Photo credit: Brian Fluharty-Imagn Images) The 4 Nations Face-Off championship game between the United States and Canada on Thursday...
(Photo credit: Geoff Burke-Imagn Images) The short-handed Milwaukee Bucks weathered a sluggish start and a game-ending, seven-minute...
LONDON, U.K.: A judge has approved an emergency financial plan to prevent Britain's largest water company, Thames Water, from collapsing,...
NEW YORK, New York - Concerns over U.S. President Donald Trump's startling diversions from his country's long-held policies, and the...
DALLAS, Texas: Southwest Airlines is laying off 1,750 employees, or 15 percent of its corporate staff, in the company's first significant...
MELBOURNE, Australia: Australia's central bank has cut its benchmark interest rate for the first time in more than three years, signaling...
BRASILIA, Brazil: Brazil has officially approved joining OPEC+, aligning itself with the world's major oil-exporting nations just months...
NEW YORK, New York - U.S. stocks fell sharply Thursday as profit-takers moved in to take the cream off the substantial gains that have...