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The British regulator is charged with allowing Thames to be guided by the supervision of Hedge funds and other creditors without the formal transfer of ownership of British largest water.
The Thames Water Legal Control was transferred to creditors who provided a controversial loan of £ 3 billion to the utility communal communal service without an official approval from the ofWat, according to a letter to a regulator who established Charlie Maynard, a liberal democratic representative at the beginning of this month.
Older creditors of utility services Include Hedge Funds Elliott Management and Silver Point Capital, as well as institutional investors.
The regulator is intended to approve any change in ownership control. Not a close defense Temma water“Ultimate Controller” as its legal owner, an ofwat’s municipal programs license is wider as “any person who.
Usually, the company’s shareholders would be filled with this role. But the investors in the capital of Thames Water – which include the pension funds of Omers and USS, as well as Chinese and Abu Dhabi sovereign wealth funds – they moved away from work and declared a “unusable” company.
Since then, they have written the value of their roles to zero, removed representatives from the Thames Water board and seemingly playing no role in his current or future management. The process is ongoing to find an attempt to find New investors in capital.
Thames Water shareholders do not seem to have a position of control or material influence on usefulness, while a higher group of bond holders seemingly “meets this definition,” read letters to Maynard’s lawyers in Marriott Harrison.
The claims come because the company awaits the key judgment of the appellant’s court as a rival group of bond owners for an emergency loan litigation of £ 3 billion, which helps Thames lead water in the air. Without it, the company said it would run out of cash at the end of March.
Tim Short, investment banker and expert in the regulated funding structure, is charged with the “flagrant deleoction” for its duties that could alleviate investors’ confidence in the regulatory system.
“It is clear that the change in control has already happened because the previous control parties have left; However, ofwat allowed a situation where there was no clear ownership of the company or the Committee’s supervision and not considering public interests, “he said.
Ofwat denies that this has made it possible to change control of an emergency loan. In Maynard, he replied, saying that Thames Water had informed that in January he had informed that there had been no change, and the regulator “continued to maintain this position in the review”.
When asked by answers to the allegations, ofwat said: “An extensive financial and operational turn in Thami is necessary. The company must continue to follow all the possibilities for the search for further capital to finance its reversal plan for the benefit of customers and the environment. Our supervisory surveillance regime that was introduced last year, including an independent monitor, is in force to oversee this. “
The appellanting court is expected to finance emergency financing. If the judges reject the proposed loan of a higher bond owner, which comes with an interest rate interest rate and a 9.75 percent fee, it is expected that the company will fall into the government Special Administration Regimea form of temporary renationalization.
Cost estimates The taxpayer if the company falls into SAR is wonderful. Thames Water presented the forecast of his advisor Teneo in court that the Government would have to climb to £ 3.4 billion at the £ 4.1 billion funding in SAR. This highly secured loan – which one is not locked in advance – It could be fully compensated if water is sold then. The debt of the debt of the company could also be frozen under the SAR.
Maynard, who appeared at the hearing of the appellant’s court and others challenged Thames Water figures, and the lawyer asked questions about Teneo’s independence, since he was also a communal advisor. Instead, the Maynard team estimated that SAR would cost only £ 66m. Ofwat said he had not seen evidence to support this much lower figure.
At the first hearing last month because of the dispute for the loan, General Advisor to Thames Water, Andy Fraiser and the leading counselor of senior bond holders, David Burlison, both accepted that the main owners of the bonds were now “economic owners” of utility for growing financial enchantment.
Burlison, an older restructuring banker in Jefferies, also said his clients – involving US Hedge funds like Elliott’s administration – “want to have elements of control” over Thames Water.
Older bond owners said in a statement to the Financial Times: “Creditors have no ownership rights or ownership management of the company. They are not shareholders, but they work hard to help the company return to a sustainable basis given that there is no value in the capital and all the shareholders have left. “
Thames Water said: “Our creditors are not our ultimate controllers, and our plan of liquidity expansion has no effect on ownership or ultimate business control, which has not changed.”
