The court of appeal upholds Thames Water’s £3bn rescue loan, but critics warn customers will bear the cost
Thames Water has secured a crucial £3bn rescue loan after the Court of Appeal dismissed objections, allowing the debt-ridden company to continue operating for at least another year. The ruling comes despite fierce opposition from some creditors and Liberal Democrat MP Charlie Maynard, who argue that the deal primarily benefits existing lenders rather than the 16 million customers who rely on Thames Water’s services.
The decision provides the UK’s largest water company with temporary relief, giving it time to restructure its staggering £19bn debt and seek further investment. Thames Water, which supplies water and wastewater services across London and southern England, had warned that without the loan, it could run out of cash by the end of March, forcing the government to take emergency control of the company.
A Lifeline for Thames Water or a Cash Cow for Lenders?
The rescue loan was initially approved in February, but a small group of lenders challenged the terms, arguing that the 9.75% interest rate attached to the deal made it too expensive. Maynard and other critics believe that instead of propping up Thames Water’s private lenders, the government should place the company into special administration, as it did when energy firm Bulb collapsed.
Maynard, who has been a vocal critic of the deal, slammed the court’s decision, stating:
“Thames Water remains a cash cow for its lenders, while its 16 million customers are left to foot the bill for the company’s ludicrously expensive interest charges and advisory fees.”
He urged the government to intervene, insisting that nationalisation would better serve the public interest. Meanwhile, a spokesperson for the creditors opposing the plan expressed disappointment, vowing to explore all legal avenues, including a potential appeal to the Supreme Court.
Thames Water’s Response and What’s Next
Thames Water CEO Chris Weston welcomed the ruling, calling it a vital step in stabilising the company’s finances. He confirmed that the first £1.5bn tranche of the loan will be released in instalments over the coming months.
“We remain focused on putting Thames Water onto a more stable financial foundation as we seek a long-term solution to our financial resilience,” Weston said.
Despite the court victory, the company still faces major challenges, including widespread public outrage over sewage spills and leaks, as well as mounting pressure to modernise the UK’s ageing water infrastructure.
What This Means for Customers
The court’s ruling does not affect Thames Water’s planned 31% bill increase, set to take effect in April. The sharp rise in customer charges has only added to public frustration, with many questioning why households should bear the burden of the company’s financial mismanagement.
With debts still looming and legal battles potentially far from over, the fate of Thames Water remains uncertain. Whether this £3bn bailout is a true lifeline for the company or just a temporary reprieve before further crisis unfolds remains to be seen.
