In a demonstration of the current challenges facing Thames, its primary shareholder has reportedly enlisted the expertise of restructuring and insolvency specialists from renowned law firm Clifford Chance. The Ontario Municipal Employees Retirement System, which owns a significant 32% stake in Thames, appears hesitant to provide additional capital to the struggling company due to previous unsuccessful investments in the UK. Another one of Thames’ nine investors, primarily located overseas, has also yet to determine whether they will inject funds to rescue the company. Despite the uncertainty, there is still hope that a resolution can be reached. The Universities Superannuation Scheme (USS), Britain’s largest pension fund and the only UK shareholder of Thames Water, supports the idea of providing fresh capital to the business, according to senior sources.
These recent events threaten to overshadow a new “action plan” announced by Jeremy Hunt, the Chancellor. The plan, developed in collaboration with regulators, aims to ensure fair treatment of consumers. As part of the plan, Ofwat will take a tougher stance against water companies that do not adequately assist customers in paying their bills, accessing help, and repaying debts.
Ed Miliband, Labour’s shadow climate and net zero secretary, condemned the situation at Thames, referring to it as a “total scandal.” He criticized the industry’s dividend pay-outs and accumulated debt. However, Miliband expressed caution regarding the nationalization of water companies.
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