(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.
The British firm, 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 renationalisation.
“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,” the Class B creditor group said.
Thames Water said it remained focused on implementing the company plan, stabilising the business and seeking the best financial and operational outcome.
As of Jan. 3, creditors holding about 89% of the company’s secured debt worth 16.5 billion pounds were in support of its current liquidity plan, Thames Water added.
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 creditors.
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.
($1 = 0.7971 pounds)
(Reporting by Yamini Kalia in Bengaluru and Anousha Sakoui in London; Additional reporting by Radhika Anilkumar and Aatrayee Chatterjee; Editing by Mrigank Dhaniwala and Shounak Dasgupta)
