Thames Water restructuring approved by High Court judge

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. After taking into account the public interest in ensuring the uninterrupted provision of vital public services, I nevertheless exercise my discretion to sanction the plan Mr Justice Leech TWUH’s lawyers claimed the company would enter special administration if the plan was not approved, but a smaller group of secondary creditors proposed an alternative plan known as the “B plan”, which the court heard would provide the company with the same funding but on better terms and should be adopted instead. In a judgment on Tuesday, Mr Justice Leech ruled that the “relevant alternative” to the company plan being approved was SAR, and said: “After taking into account the public interest in ensuring the uninterrupted provision of vital public services, I nevertheless exercise my discretion to sanction the plan.” A hearing before the same judge, dealing with consequential matters arising from the judgment, is set to begin later on Tuesday. “Customers and residents who are struggling with their bills will be horrified at these costs and mystified how the Thames Water Group has been able to fund them or why it has agreed to do so.” He continued: “If it had been clear that TWUL would have had to bear all of these costs totalling £800 million as the price of extending the liquidity runway until the equity raise could be completed, I might have been tempted to refuse to sanction the plan on the basis that the costs were simply too high and that the plan company should present a new plan on much better terms.” But the judge said he was persuaded to approve the plan because he was “not satisfied that TWUL or its customers will have to bear the finance costs of the plan whether in the short term or the long term.” He also said he “ought to give the plan company an opportunity to finish the jigsaw” through the substantive restructuring. He said: “There is a public policy in favour of rescuing the Thames Water Group and giving the market a chance to agree a permanent restructuring plan before the Government is forced to fund a special administrator.” He also added that Ofwat and the Environment Secretary “have not opposed the plan”.