Creditors Propose £4bn Debt Write-Off to Rescue Thames Water
Creditors of Thames Water have tabled a £4bn debt reduction proposal, aiming to rescue the UK's largest utility company. The plan, backed by prominent investors, involves revised pollution and sewage targets, and no dividends to shareholders until 2030.
The consortium London & Valley Water, comprising Aberdeen Investments, Elliott, PIMCO, and Silverpoint Capital, has put forward this rescue and recapitalization offer. The group believes their plan is the swiftest and most dependable route to save Thames Water. Key aspects include a 25% debt reduction and an initial £5bn investment, with over £3bn coming from new equity.
Creditors, including Apollo Global Management and BlackRock, aim to gain full approval for their plan by the end of the month. They hope to avoid new bill increase appeals and ensure the company's long-term sustainability. Notably, several investors, such as private equity giant KKR, have withdrawn from takeover negotiations.
Chancellor Rachel Reeves has expressed a preference for a market-based solution over nationalisation. If approved, the creditors' plan would see outstanding fines to regulators, including Ofwat, paid off. However, no sale of the company would occur before March 2030, and shareholders would not receive dividends during this period.
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