Thames Water Creditors Pitch Fresh Funds, Steeper Debt Haircuts

Thames Water’s senior creditors have pledged to inject £5.4 billion ($7.3 billion) of fresh funds into the company and accept a 25% write-down on existing liabilities as part of their bid to rescue the ailing utility.

The proposal includes £3.15 billion of new equity and £2.25 billion of debt, according to a statement Thursday by the group of senior creditors called the London & Valley Water consortium. The proposal includes a partial haircut of £4 billion on Thames Water’s more senior Class A debt and a full write-down of the more junior Class B debt, totaling around £1 billion, the group said in the statement. In exchange for accepting an estimated 25% loss on their nominal investment value, Class A creditors will get a minimum of 10% equity in the company.