Thames Water’s largest shareholder has reduced the value of its stake to zero as the crisis gripping Britain’s biggest water supplier deepens.
Canadian pension fund Omers said it would make a “full write-down” of its investment in Thames.
The 31.7 per cent stake in Thames parent company Kemble was valued at up to £990m at the end of 2021.
This figure fell to £700m last year as concerns about the company’s debt began to rise. But the pension fund has said it is worthless now.
The update came just a day after Michael McNicholas, chief executive of Omers Infrastructure, resigned from his role as non-executive director of Thames.
It’s running out: Canadian pension fund Omers announced that it will “fully depreciate” its investment in the Thames
Omers’ decision to distance itself from the Thames underlines the scale of the crisis at the UK’s biggest water company as it fights for survival.
The future of the company, which has £18bn of debt, has been in doubt since shareholders refused to hand over £500m last month amid a dispute with regulator Ofwat. The utilities group, which has 16 million customers, said shareholders withheld cash because they said regulators’ demands made its business plan “uninvestable.”
Thames wanted to increase customer bills by 40 per cent to fund an £18.7bn investment plan, but Ofwat blocked the increase. The parent company also defaulted on its debt last month.
Thames Water was privatized in 1989 under Margaret Thatcher’s government, when she sold the nationalized water and sewage industry for £7.6bn. But taxpayers could foot the bill if the Government is forced to bail out Thames, which faces administration if it cannot raise fresh funds by the end of next year.
Thames has said it aims to spend at least £1.1bn on “projects that benefit the environment”.
Ofwat will publish a resolution on all water companies’ five-year plans (including water bills) on 12 June.
Severn Trent boss defends £3.2m deal
In charge: Liv Garfield
The Severn Trent boss has defended his multi-million pound pay package despite being responsible for more than 60,000 wastewater discharges last year.
Liv Garfield, chief executive since 2014, received £3.2 million in salary, bonuses and shares in 2023.
The number of wastewater discharges into Severn Trent reached 60,253, more than a third more than the previous year. Garfield told BBC Radio 4’s Today program that last year’s record strokes “don’t make me feel good.”
But he added that the company had “made enormous strides in river quality” and “improved river health.” The company had made “spectacular progress,” he said.