London (AFP) – A UK court on Monday upheld an emergency loan granted to Thames Water, allowing Britain’s largest such supplier to keep a financial lifeline as it drowns under massive debt. The High Court in London last month authorised the £3 billion ($3.9 billion) loan, allowing Thames to stay afloat and stave off a costly public bailout. However, it was subject to an appeal last week by some of the company’s smaller creditors displeased at the terms of the package. Thames serves 16 million customers, or a quarter of the UK population, in London and surrounding areas.
“We are pleased that the Court of Appeal has today decisively refused the appeals and upheld the strong High Court decision,” chief executive Chris Weston said in a statement. “We remain focused on putting Thames Water onto a more stable financial foundation as we seek a long-term solution to our financial resilience,” he added. The company said it expects to receive the first half of the loan over coming months. The funds are seen as only a short-term solution for the company, which already had £16 billion of debt, as it looks to attract takeover bids.
Thames is scrambling to find fresh sources of funding, including appealing to the UK water regulator to be allowed to hike bills more than granted. The company’s customers are set to see average annual water bills rise to £588 by 2030 following a decision by British regulator Ofwat – falling short of the 59-percent hike requested by the troubled group. Thames and other British water companies, privatised since 1989, are meanwhile under fire for allowing the discharge of large quantities of sewage into rivers and the sea. This has been blamed on under-investment in a sewage system that dates back largely to the Victorian era.
© 2024 AFP
