Thames Water's Creditors Challenge Restructuring Proposal
(Reuters) -Thames Water's lower-ranked creditors on Tuesday filed an objection to the struggling utility company's proposed restructuring plan and sent a letter outlining an alternative.
Thames, burdened with 17 billion pounds ($21.33 billion) of debt, has been struggling to get an equity raise approved to extend its liquidity runway and dodge a renationalization.
"The Alternative Restructuring Proposal provides Thames Water with significantly more committed funding on much cheaper and more flexible terms as compared to the Class A restructuring plan," said the Class B creditor group.
Class A creditors are so-called senior creditors, who will be paid back before others, including the Class B, or lower-ranked, creditors.
Class B creditors have issued a so-called Practice Statement Letter, their "first formal step" in relation to their alternative restructuring plan.
Their plan includes a proposal of 3 billion pounds in committed funding bearing an interest rate of 8%, in contrast to the 9.75% rate in the restructuring plan endorsed by the company and 75% of the senior creditor class.
The filing precedes a court hearing of the two restructuring proposals set for Feb. 3-6.
The restructuring plan proposed by the Class B creditors will also be independently evaluated at a different hearing on Jan. 20.
Thames Water did not immediately respond to a request for comment on the new plan.
($1 = 0.7971 pounds)
(Reporting by Yamini Kalia in Bengaluru and Anousha Sakoui in London; Additional reporting by Radhika Anilkumar; Editing by Mrigank Dhaniwala)
