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
[email protected]

Media enquiries

Suvra Jans - Head of Media Relations
[email protected]
M: 07747 640 810

Legal Entity Identifier Numbers:

Thames Water Utilities Limited: 213800JKM5UQHFJOTZ25

Thames Water Utilities Finance Plc - 213800SKZTSE2L1BII69