Thames ratchets up the pressure ahead of High Court appeal decision

Following three days of debate at the High Court, many hours of which concerned arguments about the valuation of the utility, Thames Water awaits a verdict on the efficacy of its A creditors’ plans. A decision is expected from the High Court by the middle of this week. Thames' management said that it will run out of cash on 24 March if its debt restructuring proposals are not adopted.

Ofwat told the Court that it sees no evidence to support the claim by Charlie Maynard MP that the Special Administration Regime (SAR) would only cost the Government £66m. Thames, in contrast, has estimated that SAR could cost taxpayers up to £4bn. Steve Reid, the environment secretary, publicly remains opposed to the proposal to take Thames into the SAR.

As the deadline for a decision approaches rapidly, the trustees of Thames’ pension scheme have also expressed concern that members of its pension scheme may suffer if Thames goes into the SAR. In this case the members would be transferred to the Lifeboat Pension Protection fund which provides lower future benefits than those promised by the existing scheme.

According to press reports, Thames is asking for the formal referral of its PR24 appeal to the CMA to be delayed while equity bidders are secured. Management also continues to ask for a stay of execution on fines, and leniency on operational underperformance penalties in order to attract bidders, which are said to include CKI, KKR and others. Thames argues that the returns required by equity investors will be eroded by fines and costs by the end of the decade, making it unattractive to potential new owners.

• Thames Water has given BBC journalists exclusive access to film a ‘fly on the wall' style documentary, following its employees over the past year while they navigate the financial position of the business, work to improve company performance and experience day to day challenges on the front line and in the public eye. Thames Water: Inside the Crisis will air on BBC2 today and tomorrow, and will be available on iPlayer.