Thames Water Creditors Question £3-B Rescue Loan

A proposed £3 billion ($3.8 billion) rescue loan for Thames Water has sparked a legal clash, with rival creditors claiming it would hand excessive control to senior lenders.

Thames Water is the UK’s largest provider of water and sewerage services. I Photo: Thames Water Facebook

Lawyers representing junior creditors told a London judge, that the deal would hold the company "to ransom," Giulia Morpurgo and Jessica Shankleman reported for Bloomberg News.

Thames Water, the UK’s largest provider of water and sewerage services, serving 16 million customers, urgently needs emergency funding to address its heavy debts.

However, junior creditors argue their alternative restructuring proposal offers a more affordable option, with a lower interest rate of 8% compared to the 9.75% rate in the plan backed by senior creditors.

The company’s leadership has agreed to the loan terms set by its Class A creditors, including Elliott Management and Silver Point Capital.

Meanwhile, Class B creditors claim that the high financing costs and the influence granted to senior lenders under this plan are not in the company's best interest. They argue their own proposal avoids these issues, calling the existing terms akin to being "held to ransom."