A collection of bondholders in Thames Water are mobilising to protect their interests amid an intensifying battle to avert the company’s nationalisation.
Sky News has learnt that Class B bondholders were notified on Thursday they would no longer be part of the same group as the Class A noteholders represented by Jefferies, the investment bank, and law firm Akin Gump.
One bondholder source said a potential clash of interests between the two groups of lenders was the reason for the split.
The Class B bondholders are said to account for hundreds of millions of pounds of Thames Water‘s debt – a small fraction of the company’s estimated £19bn borrowings.
They are now expected to hire financial advisers and lawyers to represent their interests as Thames Water, which has about 15 million customers, teeters on the brink of collapse.
Thames is running out of time to forge a private sector bailout, with a £3bn equity raise said to have little hope of succeeding while the company’s investment plans remain subject to approval from Ofwat, the industry regulator.
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A final determination on those plans, which include sharp rises in bills, is due to be published by January at the latest.
This week, Ofwat appointed LEK Consulting to monitor Thames Water’s turnaround plans.
The Class A creditors account for roughly £12bn of Thames’s debt, and last week met the regulator to discuss an alternative restructuring that would keep the company in private sector ownership.
A spokesperson for the Thames Water class A creditor group declined to comment.