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Thames Water Wins Court Battle to Secure £3 Billion Loan

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Giulia Morpurgo and Priscila Azevedo Rocha

Mon, Mar 17, 2025, 5:49 AM 3 min read

The UK’s Court of Appeal dismissed a challenge to the proposed loan after a three-day hearing last week. The decision should give the beleaguered utility access to much needed funds and prevent a messy insolvency while it seeks a long term fix for its financial woes. The debt will be provided by a group of senior creditors — including Elliott Management, Silver Point and Pimco.

A group of junior creditors pushing for an alternative debt package and an opposition lawmaker in favor of nationalization had challenged the proposed financing. Both argued the new loan was excessively expensive.

“We remain focused on putting Thames Water onto a more stable financial foundation as we seek a long-term solution to our financial resilience,” Chris Weston, chief executive officer of Thames Water, said after the court order. Customer bills won’t be affected by the plan, he said.

The plan was approved subject to a limited modification of releases, according to a statement from Thames Water. The company is now expecting that the initial tranche of £1.5 billion will be provided in installments over the coming months, it said.

“We will continue to explore all available avenues, including seeking leave to appeal to the Supreme Court, to ensure that customers and the broader public are not forced to bear the costs of a deeply flawed restructuring process,” a spokesperson for Class B creditors said.

While the Class B creditors were “disappointed” at the appeal court’s decision, they welcomed the decision by the judges to strike out the proposed releases of company’s directors and advisers from legal liability.

Charlie Maynard, the Liberal Democrat MP who also opposed the plan, responded to the decision by reiterating his request for the government to put the company into special administration.

“We must not stand back and allow Thames Water’s lenders to keep lining their pockets at the expense of customers and the environment while our regulators sit on their hands,” he said.

Debt Burden

Thames has long been weighed down by its debt burden, which has already seen its owners write off the value of their stakes to zero. Beyond its financial woes, the company has come under criticism for its poor environmental record, which has landed it hefty fines from regulator Ofwat.

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