Thames Water Ltd appointed city veteran Adrian Montague chairman as growing concerns over the company’s financial health prompted lawmakers to summon executives to explain themselves.
(Bloomberg) — Thames Water Ltd appointed city veteran Adrian Montague chairman as growing concerns over the company’s financial health prompted lawmakers to summon executives to explain themselves.
Montague, a 75-year-old whose leading roles have included stints at British Energy, Anglian Water Group Ltd., and Aviva Plc, was brought in two days after Chief Executive Sarah Bentley abruptly quit. That sparked a rout in the company’s bonds, as it emerged that the U.K. government was in talks about contingency measures including a possible nationalization.
Thames Water is the the UK’s biggest water supplier, and the large debts it has racked up since privatization are casting doubts about the financial stability of the whole sector at a time when rising interest rates make borrowing harder. Climate change is adding to the burden on water companies, and underinvestment is now a political issue.
Prime Minister Rishi Sunak has already been forced to answer questions about the company in Parliament, as he fends off criticism the crisis is one of his own party’s making. Now lawmakers have summoned present and former executives — along with representatives of the regulator Ofwat — to answer questions on July 12.
Thames Water, which has more than £13 billion in debt, has been trying to reassure investors and the public as its finances come under scrutiny, and says it had £4.4 billion of cash and committed funding as of March 31. Ofwat described this as “strong liquidity” on Thursday, though said the firm had issues to address including financial resilience and its environmental record. Sewage being released into waterways has also become a toxic political issue in the UK.
“I now look forward to working with the Board and Executive team and Thames Water’s regulators and investors, to focus on the Company’s turnaround plan and its future financing needs,” Montague said in the statement.
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