An appeal against a £3bn rescue package for Thames Water has been dismissed following a three-day hearing last week.
The Court of Appeal’s ruling on Monday averts the possibility of the UK’s biggest water supplier being placed into special administration (SAR).
But critics argue the £3bn emergency loan from a group of Class A creditors is only a short-term fix for the troubles at Thames Water and a SAR is in the public interest.
Thames Water has amassed debts of more than £19bn and is under pressure to upgrade creaking infrastructure and reduce sewage leaks.
The full details of the court’s reasons for the dismissal are set to be published in due course. Additionally, all other consequential matters are paused until the full judgment is handed down.
A group of Thames Water’s secondary creditors and the Liberal Democrat MP, Charlie Maynard, appealed against the decision at a three-day hearing last week.
Andrew Thornton KC previously told the court the terms of the agreement were “mispriced and inappropriate” and were “designed by senior lenders for the benefit of senior lenders.”
Thames Water’s parent company, TWUH, and its Class A creditors had challenged the appeal.
Responding to the judgement, Thames Water chief executive Chris Weston said: “We are pleased that the Court of Appeal has today decisively refused the appeals and upheld the strong High Court decision to sanction the Company Plan.
“We remain focused on putting Thames Water onto a more stable financial foundation as we seek a long-term solution to our financial resilience.
“Today’s news demonstrates further progress.”
A spokesperson for the group of Class A creditors said: “The decision from the Court is clear and we hope this brings to an end the ongoing legal distractions so all parties can focus all efforts on securing billions in fresh equity and new long-term ownership for Thames Water.
“A market-based solution is the best route to achieving financial sustainability for the company in the coming months and will deliver the complex operational turnaround, improved service and environmental outcomes customers rightly expect and deserve.
“Customers will be placed at the centre of the rebuild and will not bear the costs of the restructuring. We will now be working with the company to allow it to move forward and access the money it needs to continue to invest in the business and work with stakeholders to complete an equity process this Summer.”
More to follow.