Bidders for Thames Water are reportedly considering significant management changes, including the possible dismissal of key senior executives, as part of a restructuring plan for the troubled utility. This move comes in light of government expectations for accountability, especially following substantial fines levied against the company for not meeting operational and environmental standards.
Sources involved in the negotiations indicate that a new board, led by telecommunications and regulatory expert Mike McTighe, is being established to oversee the restructuring process. Discussions are ongoing with Ofwat, the industry regulator, and the government about the direction of Thames Water.
Chris Weston, Thames Water’s chief executive, has faced criticism from Members of Parliament for receiving a £195,000 bonus after a brief three-month tenure. Lawmakers have also voiced concerns regarding the current board’s decision to distribute bonuses to senior staff while having secured a £3 billion emergency cash lifeline.
A consortium of investors, which is owed £13 billion of Thames Water’s total £17 billion debt, is proposing to enhance a rescue plan by offering approximately £1 billion in additional funding, which could involve debt write-offs and fresh capital infusion. The investors’ strategy is aimed at demonstrating their commitment to a turnaround, which they hope will convince the government and regulators to reset operational targets for the utility.
The Department for Environment, Food and Rural Affairs emphasized its commitment to acting in the national interest, ensuring Thames Water meets statutory obligations. A recent review recommended establishing a new regulatory framework to facilitate the turnaround of underperforming companies within the sector.
While Chancellor Rachel Reeves has suggested favoring market solutions over government intervention, preparations for a Special Administration Regime (SAR) are underway. Some experts have expressed that Thames Water could be an attractive asset for bidders, should a well-designed process be implemented, potentially mitigating costs to taxpayers. The situation at Thames Water appears to be reaching a critical juncture.
Source: https://www.bbc.com/news/articles/cp8z8djjml5o?at_medium=RSS&at_campaign=rss