According to information obtained by News, a group of creditors represented by the investment bank Jefferies met with representatives of the industry watchdog on Tuesday to provide the general framework of a proposal that would provide the company with much-needed breathing room.
According to City insiders, the group, which was made up of 100 different lenders, now accounted for almost £12 billion of Thames Water’s borrowings, or about two-thirds of its total indebtedness.
The syndicate is working quickly to come up with a plan that would enable a restructuring that would involve a significant debt-for-equity swap and inject new equity into the crisis-ridden.
In order for Ofwat to approve its final regulatory assessment for the company’s business plan at a board meeting in the second half of November, a deal must be reached by the middle of the month.
In order to make Thames Water investible, creditors contend that Ofwat must show flexibility in how it evaluates the company’s business strategy.
On Wednesday, the creditor group’s plans were still lacking in specifics, albeit they unavoidably included some flexibility with regard to future rises in customer bills.
In addition, Thames Water is subject to numerous regulatory penalties due to its subpar customer service record and unsatisfactory track record of sewage and water breaches.
