By Jack Mendel
Beleaguered utilities firm Thames Water was dealt a fresh blow this week after a major investor cut the value of its stake by two thirds.
Universities Superannuation Scheme (USS) slashed its stake in Thames Water to £364.4m from £955.8m the year before,according to official accounts published at the end of December for its Church Water Investment.
USS, which holds around 20 per cent of Thames Water’s parent firm Kemble, cut down its investment by 62 per cent according to the FT, as the utilities giant faces mounting problems.
The decision was “probably difficult but necessary” according to Tim Whittaker, director at Edhecinfra, a research institute and data provider, as reported by the FT.
Last month it wasannounced Thames Water appointed former Aggreko chief executive Chris Weston as its new boss, as the embattled firm looks to turn the page on a miserable few years. He is said to be on a deal worth around £2.3m.
The company has a towering mountain of debt totalling £14.7bn as bosses warned last month that turning around the embattled utility firm will “take time” and it would be impossible “to do everything that our customers and stakeholders wish to see at a pace and for a price that everyone would like.”
In early December it showed a 54 per cent decline in profit before tax in the six months to the end of September,
A potential Parliamentary inquiry was to be added to the seemingly ever-growing list of financial and operational problems at Thames Water last month, as it also faced a bankruptcy warning.
Thames Water going bust would be a disaster for London, as it provides the capital and much of the south east with its water. The company has come in for sharp criticism not only for its debt problems, but also its leakage and sewage problems.
Thames Water was told to “address their operational shortcomings and strengthen their financial resilience” by the regulator after it emerged its owners had piled more debt on the water firm. Its owners had injectedhalf-a-billion pounds of additional debt, it emerged last month.
Thames Water has been approached for comment.
