MP says he intends to appeal against approval of Thames Water restructure plans
Barristers for Liberal Democrat MP Charlie Maynard previously told the court the company should be put into special administration.
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Your support makes all the difference.An MP has said he intends to appeal against a High Court judge’s decision to approve plans to restructure Thames Water through a loan of up to £3 billion.
Charlie Maynard, the Liberal Democrat MP for Witney in Oxfordshire, said on Tuesday that the restructuring was “simply throwing good money after bad”.
His comments came after Mr Justice Leech sanctioned a plan, known as the “company plan”, which allows the struggling utility to keep operating until 2026 by providing £1.5 billion of funding with a 9.75% interest rate, with a further £1.5 billion potentially available.
I intend to keep fighting for Thames Water’s customers by appealing this judgment
At a hearing in London earlier this month, lawyers for Mr Maynard said that the company plan was a “poor short-term fix” and a “bridge to nowhere”, and that the company should be put into special administration (SAR) instead.
Announcing that he would appeal against Tuesday’s ruling approving the plan, Mr Maynard said: “I stand by my evidence to the court that allowing Thames Water to take on £3 billion more debt is not in the interests of their millions of customers.
“They will all be paying the price for this futile, expensive and extremely short-term bailout.
“This restructuring is simply throwing good money after bad. The money from our bills which is being spent on interest repayments is desperately needed to repair water infrastructure, improve customer service and clean up our rivers.
“I intend to keep fighting for Thames Water’s customers by appealing this judgment.
“The only way to get Thames out from under this mountain of debt and back onto a stable financial footing at this point is to put the company into special administration with a swift exit plan.”
Thames Water serves around 16 million customers, almost 25% of the UK’s population, but it is in about £16 billion of debt and needs £3.3 billion over the next five years to keep running.
It has also been at the centre of growing public outrage over the extent of pollution, rising bills, high dividends, and executive pay and bonuses at the UK’s privatised water firms.
There is a public policy in favour of rescuing the Thames Water Group and giving the market a chance to agree a permanent restructuring plan before the Government is forced to fund a special administrator
The court heard that it was due to run out of money by March 24 if the restructuring was not approved, with the company plan approved by creditors holding more than 75% of its Class A debt, which is worth about £11.5 billion and is the least risky class of bonds in its debt pile.
But barristers for Mr Maynard told the court in written submissions that allowing the utility to enter administration was a “better and fairer course” which served “the public interest and customers’ interests”.
William Day, for Mr Maynard, said that Thames Water “has failed to show how the restructuring plan is in the public interests or customers’ interests. On the contrary, the evidence shows clearly that it is not in their interests”.
In his ruling, Mr Justice Leech said he “ought to give the plan company an opportunity to finish the jigsaw” through a substantive restructuring due later this year.
He said: “There is a public policy in favour of rescuing the Thames Water Group and giving the market a chance to agree a permanent restructuring plan before the Government is forced to fund a special administrator.”
A further hearing before the same judge, dealing with consequential matters arising from the judgment, is expected to conclude on Tuesday.