Thames Water Utilities
Limited
20 December 2024
Liquidity Extension
Update
Thames Water Utilities Limited
("TWUL") launched a consent
process for a transaction support agreement ("TSA") in connection with a liquidity
extension transaction (as set out in a term sheet appended to the
TSA and amended on 17 December 2024) ("Liquidity Extension Transaction"), a related backstop
agreement in relation to an initial tranche of super senior funding
(the "Backstop Agreement")
and related STID Proposals on 25 October 2024. Thames Water
Utilities Holdings Limited ("TWUHL") issued a practice statement
letter on 22 November 2024 (the "PSL") which provided creditors with
notice of a convening hearing which occurred on 17 December 2024 in
connection with implementing the Liquidity Extension Transaction
via a restructuring plan under Part 26A of the UK Companies Act
2006 (the "Company
RP").
At the time of this announcement,
creditors representing over 75% of the Class A Debt (Make-Whole)
Providers, the Class A Debt (Non-Make-Whole) Providers, the
Interest Rate and Index Hedging Providers and the Currency Hedging
Providers have acceded to the TSA.
TWUL is aware that certain Class B
Creditors (the "Relevant Class B
Creditors") have indicated that they may seek to launch a
parallel restructuring plan to implement their alternative
liquidity extension transaction. In order to waive any potential
Event of Default which might arise from this, TWUL has today
launched a STID Proposal (as set out further below).
STID Proposal
The Relevant Class B Creditors have
identified a potential alternative solution to extend TWUL's
liquidity runway (the "Class B
Alternative Liquidity Extension Transaction") and advisors
to the Relevant Class B Creditors have recently indicated that one
or more of the Relevant Class B Creditors may seek to implement the
Class B Alternative Liquidity Extension Transaction via a
restructuring plan under Part 26A of the UK Companies Act 2006 in
respect of one of the Obligors (the "Class B RP") and that this may be
launched in parallel to the Company RP.
As a matter of caution and in order
to provide as much stability to TWUL's financing group as possible,
TWUL has today launched a STID Proposal seeking, subject to certain
waiver conditions, a waiver of any Defaults or Events of Default in
connection with the initiation of the Class B RP or any potential
alternative restructuring plan to extend the Proposer's liquidity
("Other Interim Recapitalised
Transaction") through a restructuring plan under Part 26A of
the UK Companies Act 2006 brought by any other creditor groups (an
"Other Creditor RP").
TWUL is not currently aware of, and has received no
indication of, any such Other Creditor RP or Other Interim
Recapitalised Transaction: these are included for completeness
only.
The waiver conditions to the STID
Proposal are (1) that the waivers granted under the 25 October STID
Proposal continue to apply, (2) that the Company RP is sanctioned
on or before 11 February 2025 (subject to any agreed extension),
(3) any applicable appeal period in relation to the Company RP has
expired on or before 18 February 2025 (subject to any agreed
extension), and no appeal is subsisting at that time and (4) if the
Company RP is sanctioned, the order sanctioning the Company RP has
not subsequently been overturned on a successful appeal (subject to
any agreed waiver confirmation in respect of this limb
(4)).
TWUL believes that this waiver would
be beneficial to Secured Creditors to ensure that no Default or
Event of Default arises while the Company RP (which has the support
of over 86 per cent. of Secured Creditors and the TWU Financing
Group as of 17 December 2024) is being progressed, should the Class
B RP or any Other Creditor RP be progressed in parallel.
For the avoidance of doubt: (i)
approval of the consents and waivers proposed in the STID Proposal
shall in no way constitute an approval of the terms and conditions
of the Liquidity Extension Transaction, Company RP, Class B
Alternative Liquidity Extension Transaction, Class B RP, any Other
Interim Recapitalisation Transaction or any Other Creditor RP which
will be sought separately in accordance with their terms; and (ii)
this waiver should not be taken as TWUL's agreement or endorsement
of the Class B RP or any Other Creditor RP and the waiver is being
pursued solely for the purposes of continuing to facilitate the
Liquidity Extension Transaction and the Company RP and to mitigate
any impact of actions of the Relevant Class B Creditors or any
other creditor group.
No bondholder meetings are being
held in relation to the STID Proposal and Qualifying Class A Debt
Providers who are entitled to vote will be contacted through their
Class A DIG Representative.
Access to Documents
The STID Proposal is available
through TWUL's investor relations website at
https://www.thameswater.co.uk/about-us/investors/liquidity-extension-update.
STAKEHOLDERS ARE ENCOURAGED TO REVIEW THE STID PROPOSAL IN
DETAIL THEMSELVES (A COPY OF WHICH IS AVAILABLE
AT
HTTPS://WWW.THAMESWATER.CO.UK/ABOUT-US/INVESTORS/LIQUIDITY-EXTENSION-UPDATE)
AND SEEK THEIR OWN LEGAL AND FINANCIAL ADVICE[1] SHOULD THEY HAVE ANY QUERIES IN RELATION TO THEIR
CONTENTS.
For further information
Investor enquiries
Frederick Maroudas - Director of
Corporate Finance
debt.investorrelations@thameswater.co.uk
Media enquiries
Suvra Jans - Head of Media
Relations
suvra.jans@thameswater.co.uk
M: 07747 640 810
Legal Entity Identifier
Numbers:
Thames Water Utilities Limited:
213800JKM5UQHFJOTZ25
Thames Water Utilities Finance Plc -
213800SKZTSE2L1BII69