Thames Water Creditors Ready New Rescue Plan with Deeper Debt Writedowns
Revised Rescue Deal and Financial Strategies
Background and Context
Sept 23 (Reuters) - Thames Water's creditors are preparing a revised rescue deal that would include deeper debt writedowns and additional equity investment to prevent the government from taking temporary control of the troubled utility, Bloomberg News reported on Wednesday.
The creditor group, London & Valley Water, plans to submit the offer as soon as next month after discussions with regulator Ofwat and government officials, the report said, citing people familiar with the matter.
Key Elements of the Rescue Proposal
Debt Writedown and Equity Funding
The new proposal would increase the debt writedown to around 35%, while boosting equity funding and setting aside at least an additional £200 million ($265.04 million) to address performance-related penalties, the report said.
The revised package would comprise about £3.5 billion in equity and £6.55 billion in debt, it said.
Governance and Turnaround Plan
Proposed Directors and Oversight
The report comes nearly a month after the senior creditors of Thames Water named the first group of proposed directors to oversee a decade-long overhaul if its rescue plan is approved.
Nine-Year Turnaround and Dividend Policy
The group is also backing a nine-year turnaround plan under which owners would forgo dividends, Bloomberg reported, as creditors seek to strengthen their case for taking control of Thames Water while avoiding special administration.
Stakeholder Responses
"We continue to work with all parties to reach an agreement that supports Thames Water's long-term financial stability," a spokesperson for Thames Water told Reuters, while London & Valley Water declined to comment on the matter.
($1 = 0.7546 pounds)
(Reporting by Sri Hari N S in Bengaluru; Additional reporting by Akshaya V; Editing by Shreya Biswas)
