Thames Water’s corporate entities may be facing a significant change in their leadership as representatives of the company’s multinational shareholders are expected to resign from their positions as directors. According to sources familiar with the matter, a number of board members at companies connected to Kemble Water Finance, Thames Water’s parent company, are likely to step down in the near future.
This development comes after the shareholders refused to provide the necessary funding, amounting to billions of pounds, to bail out Thames Water. The company, which is the largest water utility in Britain, has been struggling with an aging infrastructure and a heavily indebted balance sheet. The shareholders have made it clear that they will not commit more than £3bn to support the company.
The situation has become more precarious for Thames Water after a default on part of its holding company’s debts last month. This has raised concerns that the company may be heading towards special administration, a form of insolvency that would require the government to take over the management of a utility firm that serves almost a quarter of the British population.
Thames Water is owned by a group of sovereign wealth funds and pension funds from countries such as Abu Dhabi, Australia, Britain, Canada, and China. These investors are represented on various boards within the company’s complex capital structure. It is currently unclear if Michael McNicholas, a board member for Thames Water Utilities Limited and a representative of the Canadian pension fund Omers, is among those who will be stepping down.
The company’s future is also dependent on the draft determination that will be published by Ofwat, the industry regulator, next month. This will outline the business plans for the next five years and will be subject to negotiation before the final version is released in December. Thames Water, as well as a spokesperson for Kemble, declined to comment on the matter.
