Appeals against Thames Water bail out dismissed

Appeals against the approval of a plan to restructure Thames Water through a loan of up to £3 billion has been dismissed, Court of Appeal judges have said.

In February, a High Court judge sanctioned a plan proposed by Thames Water Utilities Holdings Limited (TWUH), the parent company of Thames Water Group, allowing the utility to stay afloat just weeks before it was due to run out of money.

A group of the utility's secondary creditors, as well as TWUH's parent company, Thames Water Limited (TWL), appealed against the decision at a hearing last week.

Liberal Democrat MP Charlie Maynard also appealed against the ruling, claiming that the company should instead be placed into special administration (SAR) to better serve customer interests.

In an order on Monday, Sir Julian Flaux, sitting with Sir Nicholas Patten and Lord Justice Zacaroli, said the appeals were dismissed with reasons to follow in writing "in due course".

Andrew Thornton KC, for TWL, previously told the Court of Appeal in written submissions that the approved plan was "designed by senior lenders for the benefit of senior lenders".

He said that the terms of the plan were "mispriced and inappropriate".

He continued that the judge, Mr Justice Leech, "failed to apply the correct principles" when making his decision to approve the scheme, and therefore "wrongly exercised his discretion to sanction the plan".

TWUH and its Class A creditors had opposed the appeal, with Tom Smith KC, for TWUH, stating in written submissions that the London court should not interfere with the decision "unless compelled to do so".

Thames Water serves about 16 million customers - about 25% of the UK's population - and owns more than 20,000 miles of water mains and more than 68,000 miles of sewers across London, the Thames Valley and the Home Counties.

The High Court previously heard that the restructuring is intended to be an interim measure to keep the utility running before a substantive restructuring due later this year.

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