Thames Water Class B investors lose appeal against bailout plan

(Sharecast News) - Britain's Court of Appeal has ruled against campaigners and investors trying to stop the Thames Water's "eye-watering" £3bn emergency bailout, according to a decision published on Monday. A group of the utility's secondary "Class B" creditors appealed against a High Court decision last month to approve the plan proposed by Thames Water Utilities Holdings Limited weeks before it was due to run out of money on March 24.

The bondholders and campaigners said the loan servicing costs of 9.75% were not in the public interest and argued that the troubled company, labouring under debts of £19bn, should be put into temporary nationalisation under a special administration regime to save money.

Monday's ruling means the company can operate long enough to restructure debts and find new investment. The deal will give the company £1.5bn in cash from creditors, released monthly, plus up to £1.5bn more to see it through an appeal to try to increase bills by more than the 35% allowed by industry regulator Ofwat.

However, in a statement the Class B creditors said they were considering taking leave to appeal to the Supreme Court and will make a final decision once they have seen the wording of the judgement. No date has been set for publication.

Thames, which has 16 million customers and 8,000 employees, has been on the teetering on the verge of collapse for months amid severe criticism over its payout of billions in dividends to shareholders under previous owners and polluting rivers with sewage.

Reporting by Frank Prenesti for Sharecast.com