Thames Water has a ~£16 billion debt pile; now it owes £123 million in fines as well
The company has been hit with the biggest fine in UK water regulation history.
On the homepage of its website, Thames Water says it “takes care” of water for 16 million people in the UK. Industry watchdog Ofwat doesn’t seem to agree.
Britain’s biggest water company has been handed £122.7 million in fines by the regulator, with Ofwat Chief Executive David Black saying that the business had “let down its customers and failed to protect the environment.”
Here come the waterworks
Thames Water and its shareholders are on the hook for £104.5 million owing to the company’s wastewater operations, with some pointing to its waterway-polluting practices (and those of its rivals) as key factors in as yet unsuccessful bids to nationalize Britain’s water companies. Last year, Thames Water announced a 40% spike in sewage spills from January to September.
The additional £18.2 million fine came from a separate investigation into the company’s dividend payouts, marking the first time that Ofwat has penalized a utility for dishing out dividends that don’t reflect “delivery performance for customers and the environment.”
For years, Thames Water has been flooded with growing debts.
The water company’s net debt has mounted since it was first privatized in 1989, though it really began to soar after being taken over by Australian investment bank Macquarie in 2006. According to critics, Macquarie’s stewardship of Thames Water — and the billions of pounds in dividends it extracted — left it in dire financial straits. The company’s borrowings ballooned to more than £10 billion by the end of 2016, the last year before Macquarie sold its final stake in March 2017.
Now, with net debt at £15.8 billion in 2024 and Thames Water estimating that fines could cost it £900 million over the next five years, the company’s struggles to stay afloat look even more difficult.
