By Sarah Young and Andres Gonzalez
LONDON (Reuters) – Britain’s Thames Water will attempt to convince a court on Tuesday to approve a 3 billion pound ($3.8 billion) lifeline, one of several hurdles it must clear to avoid nationalisation.
A High Court judge will hear from Britain’s biggest water supplier and its creditors before deciding in January whether to approve the rescue, without which Thames has said it could run out of cash by March.
Thames, which has 17 billion pounds of debt, is confident it will succeed as more than 75% of senior creditors support the plan. But a group of lower-ranked creditors remains opposed.
Last week, Thames made some fee changes and said if these were approved, it expected support from creditors representing more than 75% of its interest rate and index swap banks.
Some members of the rival creditor group, which has proposed its own package, have said the Thames-backed deal benefits the most senior creditors and its 9.75% rate makes it too costly.
The High Court hearing will be followed by a creditor meeting on Jan. 13 and a sanctions hearing on Jan. 20, a schedule shows.
Thames was plunged into crisis in March when its owners refused to stump up new cash, calling the utility “uninvestible” and putting the government on standby to nationalise it.
As well as the lifeline, Thames needs to secure 3.25 billion pounds in equity and to restructure its debt.
The water regulator will announce on Thursday how much Thames can charge customers for the next five years, a decision that could make or break the equity raising.
($1 = 0.7906 pounds)
(Reporting by Sarah Young; Editing by Paul Sandle and Alexander Smith)
