Thames Water who is the largest water company in the UK is set to run out of cash by 24 March and the High Court has been told by not approving restructuring plans is a “risk which cannot be run.”
The parent company of Thames Water (TWG), Thames Water Utilities Holdings Limited (TWUH) risks entering special administration should a High Court judge not approve plans to put £3 billion into the company to keep it afloat.
The High Court hearing in London will last four days and the scheme called a “company plan” is backed by the majority of the company’s creditors.
Charlie Maynard, the MP for Witney Oxfordshire opposes the plans, and he is calling for Thames Water to be placed into administration as the plans is “a short term fix at the expense of the company, Thames Water customers and UK taxpayers” the court has been told.
Tom Smith KC, for TWUH, said in written submissions to the court, “If the present plan was not to be sanctioned, the directors would therefore be faced with a situation where the existing plan, which had been the product of many months of negotiation and work, had been rejected, and where the group’s cash (is) due to run out in around six weeks’ time.
“Further, this is the context of the group being a provider of essential infrastructure services to millions of people in one of the major cities in the world.”
He continued: “Given the importance of the role of the group, it is simply not possible to take any risk at all that it may run out of cash which would cause it to cease operations.
“For reasons which barely require stating, that it is a risk which cannot be run.”
Thames Water has 16 million customers and owns and operated 68,000 miles of sewers across London and has more than 20,000 miles of water mains.
The company is £16 billion in debt and over the next five years Thames Water needs £3.3 billion to keep the business running and the restructuring bid will be an attempt to shore up finances from their investors.
