Thames Water on Friday said it had reached an agreement with key Class B creditors on a proposed recapitalisation, securing support from holders of more than 60% of its junior Class B debt and advancing efforts to restructure Britain's biggest water utility, Reuters reported.
The proposal would see about £1 billion ($1.33 billion) of Class B debt written off, with those creditors receiving a roughly 5.9% recovery through equity and other rights in the restructured company in return.
Thames Water said talks with the London & Valley Water consortium, Ofwat and other regulators on the proposed recapitalisation were ongoing, with no decision yet taken on whether to proceed with the consortium's proposal.
The Gazette Herald independently reported details of the consortium's plan: the group would pump in £3.15 billion of new equity into Thames Water and provide £2.25 billion in new debt, alongside writing off about £1 billion of Class B debt and a further £2.5 billion of debts held by Thames Water's holding company. The consortium set out plans for £20.5 billion in planned spending, without the need for bill rises above those agreed by Ofwat.
Thames Water chief executive Chris Weston said the proposals were an "important milestone" in ongoing work with creditors and stakeholders to secure a market-led recapitalisation, according to the Gazette Herald. Ofwat said it would continue to engage with the consortium and was reviewing its plans carefully. A previous proposed rescue deal with US private equity firm KKR collapsed in May, and the government has stressed its preference for a market-based solution.