Unlock free Digest editor
Roula Khalaf, editor of FT, chooses her favorite story in this weekly newsletter.
Thames Water got the green light to take up to 3 billion pounds of high cost of borrowing in an effort to avoid non -solvency, after the High Court in London signed a controversial salvation of creditors.
Komunal, who has already been strained below £ 19.5 billion, requested the court’s approval to borrow up to £ 3 billion from his best creditors. The company says it will give him a breathing space to raise capital from new investors and negotiate his debts.
Mr Justice Lech, who chaired the High Court multi -day hearing earlier this month, approved a loan in a 178 pages on Tuesday. He said he fulfills the necessary criteria for English corporate law and is not unfair to lower ranked bond owners.
“This is good news for our customers, puts our business in a firm financial basis and allows us to continue investing in our network and providing critical upgrades of infrastructure for our customers and the environment,” said Thames Water Water CEO Chris Weston.
Without the referee’s approval, Temma water It was risk running out of cash on March 24, when it takes £ 200 million long that utility has no other repayment method. Thames Water would then almost certainly become the first water company to fall into the Government’s special administration regime because utilities in England and Wales were privatized in 1989.
The rescue loan has proven to be controversial, however, because lenders, including the US HEDGE Fund Elliott Management, charge huge interest rates of 9.75 percent, along with other fees and sweeteners.
According to his verdict, Leech noted that the interest rate at the loan was “very, very high” and that the advisory fees could be described as eyes for the eyes. “
“Customers and residents fighting with their accounts will be terrified of these costs,” he wrote.
