Thames Water announced on 18 November that its Security Trust and Intercreditor Deed (STID) proposals have been accepted by a sufficient number of bond holders.
This is the first stage of Thames’ emergency funding and the waivers agreed now allow £0.4bn of reserve funding to be released which otherwise would have been reserved. This enables Thames to continue with its planned investment and maintenance, providing a runway of cash to March 2025.
Despite criticism of the cost of the emergency finance, the proposals have provided access to cash within a very constrained financial timeframe.
However, the rival B class bondholders have since asked for a ‘make-whole-provision’, according to press reports. This relates to early repayment of the emergency loan. They also want Thames to remove the obligation to seek creditor approval before refinancing the new debt.
It is unclear whether these proposals would be acceptable to the A class creditors. Thames Water is said to be keen to unite the competing shareholder groups.
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