The UK government has updated the 30-year-old special administration regime for water companies making it possible to rescue water companies.
The new legislation (plus two draft instruments) aims to modernise water company insolvency legislation in the face of the growing challenges in the industry including higher operating costs, claims over sewage pollution and significant debt burden (Thames Water owes 18.3 billion).
New special administration regime
- The special administrator can now transfer the operating business as a going concern to a wholly owned subsidiary through a hive-down. The company’s assets are transferred, and the shares sold to a buyer potentially leaving the debts behind in the group.
- Where the special administrat…