LONDON (AP) — Thames Water, which serves 16 million people in and around London, has received court approval for up to 3 billion pounds ($3.7 billion) of emergency funding, preventing the company from falling into government administration.
The High Court in London on Monday dismissed an appeal from a small group of creditors who argued that the funding package was too expensive and favored bigger lenders. The appeal challenged the court’s earlier decision to authorize the deal, which has been backed by lenders holding about 90% of the company’s debt.
The court said it would release the reasoning behind its decision at a later date.
Thames Water, which has about 17 billion pounds ($20.9 billion) of debt, was in danger of running out of money within days if the court had not authorized the new funding. That would have forced the government to consider nationalizing the company.
Both the government and Thames Water say water will continue flowing to customers regardless of what happens.
Thames Water is at the center of nationwide anger over sewage spills that have fouled lakes, rivers and beaches at a time when water and sewage companies are seeking billions of pounds in rate increases to modernize their systems and cope with the demands of climate change and population growth.
Consumers and politicians have criticized the company, arguing that Thames Water created its own problems by paying overly generous dividends to investors and high salaries to executives while failing to invest in pipelines, pumps and reservoirs. Company executives say the fault lies with regulators who kept bills too low for too long, starving the company of the cash it needed to fund improvements.
Ofwat, which regulates water companies in England and Wales, in December approved a 35% increase in Thames Water’s consumer charges over the next five years. The company argued that bills needed to rise 53% in order to finance needed projects and provide the financial returns necessary to attract investors.