LONDON (Reuters) – Universities Superannuation Scheme (USS), one of the largest investors in Thames Water, has given its support to Britain’s biggest water supplier after the abrupt departure of its CEO raised concerns about its viability.
The British government is considering temporary state ownership of the company, which supplies a quarter of British households, if it cannot raise more funds to drive its turnaround.
“We have given our backing to Thames Water’s turnaround plan and Net Zero roadmap and engage with them regularly to support their long-term strategy,” USS group CEO Bill Galvin said on Friday in a note to its sponsoring employers.
“We remain of the view that, with an appropriate regulatory environment, the long-term objective of repairing important UK infrastructure and paying pensions to our members are in strong alignment,” he said.
Thames Water is struggling with 14 billion pounds ($17.8 billion) of debt and has failed to meet customer and environmental targets, including stemming the flow of raw sewage into rivers.
Its management had asked shareholders for a 1 billion pound equity injection to strengthen its balance sheet and fund the necessary upgrade of ageing infrastructure.
Its other owners include Ontario Municipal Employees Retirement System and China Investment Corp.
USS’s Galvin said the group’s diversified approach to investing meant it did not expect events surrounding Thames Water to have a material impact on the funding position or contribution rates coming out of its 2023 valuation nor on the security of members’ pensions.
($1 = 0.7876 pounds)
(Reporting by Carolyn Cohn; Writing by James Davey; Editing by Daniel Wallis)
