KKR who are a major private equity firm has pulled out from investing in Thames Water which puts the company in a precarious position.
Thames Water is the UKโs largest water company and serves 16 million customers and is now in talks with senior creditors as they seek to sort out their finances.
“KKR has indicated that it will not be in a position to proceed,” Thames Water said in a statement.
Chairman of Thames Water, Sir Adrian Montague, said, “Whilst today’s news is disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal.
“The company will therefore progress discussions on the senior creditors’ plan with Ofwat and other stakeholders.
โThe board would like to thank the senior creditors for their continuing support.”
David Black, the Chief Executive at Ofwat, said, “This is a clear-cut case where Thames Water has let down its customers and failed to protect the environment. Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.
“The company also failed to come up with an acceptable redress package that would have benefited the environment, so we have imposed a significant financial penalty.
“This decision provides certainty for the company for both its past failures and what we expect from the company to comply with its obligations in future.
“[Thames Water] is seeking new buyers to fund its turnaround to provide better services for customers and the environment by improving operational performance and financial resilience. This provides a clear opportunity to break with the past. Thames Water will now need to correct the issues our investigation has identified.”
Environment Secretary Steve Reed told LBC, “The Government is clearly keeping a very close eye on what’s going on. We’re monitoring the situation, but there’s no disruption to the water supply. Thames has got a number of options that they’re exploring.”
Reed added, “If the circumstances happened with any company, any water company, where there was a breach and it would need to be put into special administration, that would happen but, as things stand, that’s not applying to any company right now.”
Leave a Comment