Thames Water creditors said to have offered alternative financial lifeline

(Sharecast News) - A group of Thames Water creditors have reportedly proposed an alternative liquidity package of up to £3bn to give the British utility more time to seek a restructuring of its debt. Reuters cited sources with knowledge of the matter as saying that the group - comprising investors with hundreds of millions of pounds worth of so-called B notes - hope their plan will compete with one proposed by a more senior ranking group of A bondholders.

It was understood that the group, whose members include large institutional investors and banks, is offering the company a new debt facility of £1.5bn to £3bn at an interest rate of 8%.

It is unclear if Thames Water will consider the proposal or how the group will put it together.

Thames Water has been in crunch talks with creditors about securing funds to keep it going for a few months while it seeks billions of pounds it needs to survive.

The aim of the alternative plan is to give Thames Water liquidity and a stable platform as it seeks to raise longer-term capital from investors, according to one of the Reuters sources. The group hopes that in comparison its liquidity package imposes fewer conditions on the company, a second person said.

It was understood that talks with the group are advanced.