Thames Water’s latest rescue deal which includes a three billion pound loan will go ahead.
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00:00So, Thameswater is still due to receive £3bn as part of a restructuring plan to save the
00:09company from collapsing. This is because an appeal launched by opposing creditors who
00:16opposed this particular loan on the basis it would be too difficult to repay has failed.
00:23A High Court in February initially gave Thameswater approval to receive this £3bn loan. This
00:31loan, to be repaid at a 9.75% interest rate, which I might add is particularly high, formed
00:39part of a restructuring plan that was of course to prevent the company collapsing and ultimately
00:45ending up under government control. Thameswater have accumulated around £19bn of debt.
00:53Around £11bn is actually owed to the same creditors who are funding this latest loan.
01:00Obviously, this is all a bit technical. What does it actually mean for Londoners? Well,
01:07it's not really good news. Bills are unfortunately expected to rise significantly over the next
01:13few years, with Thameswater actually pushing the regulator as we speak to allow for higher
01:21bill increases. The company has also come under fire for paying out immense bonuses
01:27to senior directors, with the company even threatening to increase the salaries of its
01:34top directors if Ofwat, the water regulator, follows through on plans to limit bonus payments.