Thames Water have been accused of overpromising and underdelivering amid news they cannot afford to pay off loans.
Earlier this year, the company invested over £4 billion to improve sewage systems. This was in response to criticism over discharging sewage across the Thames and its connecting rivers.
Yesterday, the company’s executives told the Environment Committee, they won’t be able to pay a £190 million loan due in April 2024.
This is in addition to the £1.35 billion of external debt that Alastair Cochran, Joint Chief Executive Officer, said the holding company has.
Charles Watson, CEO River Action
CEO of River Action, Charles Watson, questioned the proposed sewage plans and predicted a financial fall.
He told City London News in October that “the big question there is can they afford it?
“They are very, very challenged financially.”
Mr Watson echoes the recent concerns raised by the Regulator Ofwat.
“We need to prioritise”
Chris Weston, former British Gas Executive, has been named the new CEO in a bid to save the company.
Ofwat blame the debt crisis on high borrowing by the firm’s parent company, Kemble Water.
Thames Water are working with Ofwat on a “three-year turnaround” rescue plan, to help finance future projects and developments.
Ofwat’s Cathryn Ross, told the Environment Committee: “We need to prioritise. We just cannot make progress on everything.”
She says they’ve highlighted “all the things that matter most to our customers.”
Thames Water Construction
Financial Struggle
The company’s reasons for their financial predicament vary. Reports state their pre-tax profits dropped by over 50% in just six months.
Chairman for Thames Water, Sir Adrian Montague, said: “Some of the problems that we’re now encountering were because the bills were kept deliberately very low over the last period.”
The departure of Sarah Bentley as CEO in July caused uncertainty among investors, and brought the firm’s financial challenges into the public eye.
In response, their biggest investor, the Ontario Municipal Employees’ Retirement System (Omers), reduced their stake in the company.
Thames Water does not publicise the value of their shares, which leaves investors to review the value of their investment based on their own predictions.
When asked if they have the money to pay back £190 million, Mr Cochran replied: “No, not currently”.
He says they will discuss the option of extending the deadline for the repayment of loans, with shareholders.
Sir Adrian estimated that £2.5 billion will be needed to keep the water company afloat in coming years, and prevent it from becoming nationalised.
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HeadlineCharity questioned affordability of Thames Water’s sewage works months before debt crisis announced
Short HeadlineCharity boss: Thames Water's debt crisis obvious
StandfirstCharity CEO said Thames Water were overambitious with finances two months before debt crisis
Thames Water have been accused of overpromising and underdelivering amid news they cannot afford to pay off loans.
Earlier this year, the company invested over £4 billion to improve sewage systems. This was in response to criticism over discharging sewage across the Thames and its connecting rivers.
Yesterday, the company’s executives told the Environment Committee, they won’t be able to pay a £190 million loan due in April 2024.
This is in addition to the £1.35 billion of external debt that Alastair Cochran, Joint Chief Executive Officer, said the holding company has.
Charles Watson, CEO River Action
CEO of River Action, Charles Watson, questioned the proposed sewage plans and predicted a financial fall.
He told City London News in October that “the big question there is can they afford it?
“They are very, very challenged financially.”
Mr Watson echoes the recent concerns raised by the Regulator Ofwat.
“We need to prioritise”
Chris Weston, former British Gas Executive, has been named the new CEO in a bid to save the company.
Ofwat blame the debt crisis on high borrowing by the firm’s parent company, Kemble Water.
Thames Water are working with Ofwat on a “three-year turnaround” rescue plan, to help finance future projects and developments.
Ofwat’s Cathryn Ross, told the Environment Committee: “We need to prioritise. We just cannot make progress on everything.”
She says they’ve highlighted “all the things that matter most to our customers.”
Thames Water Construction
Financial Struggle
The company’s reasons for their financial predicament vary. Reports state their pre-tax profits dropped by over 50% in just six months.
Chairman for Thames Water, Sir Adrian Montague, said: “Some of the problems that we’re now encountering were because the bills were kept deliberately very low over the last period.”
The departure of Sarah Bentley as CEO in July caused uncertainty among investors, and brought the firm’s financial challenges into the public eye.
In response, their biggest investor, the Ontario Municipal Employees’ Retirement System (Omers), reduced their stake in the company.
Thames Water does not publicise the value of their shares, which leaves investors to review the value of their investment based on their own predictions.
When asked if they have the money to pay back £190 million, Mr Cochran replied: “No, not currently”.
He says they will discuss the option of extending the deadline for the repayment of loans, with shareholders.
Sir Adrian estimated that £2.5 billion will be needed to keep the water company afloat in coming years, and prevent it from becoming nationalised.
