Macquarie gearing up to sell Thames Water in a deal that could reach more than £3bn

Francesca Washtell
Follow Francesca
Members Of The New Coalition Cabinet Arrive For Their First Cabinet Meeting
Thames Water serves 15m people in London and the surrounding regions (Source: Getty)

Australian bank Macquarie is gearing up to sell British utilities giant Thames Water in a deal that could reach more than £3bn.

Macquarie, which acquired Thames Water in a debt-fuelled deal with Germany’s RWE in 2006, has hired investment bank Nomura to assist with the sale of its 26 per cent stake in Britain’s largest water company, an industry source confirmed.

The sale could generate proceeds of more than £3bn for the bank, reported the Sunday Times, which would be split between paying off Thames Water’s debt and payouts to the Australian bank and its partners.

Thames Water employs 4,700 people and provides water and sewerage services to 15m, or around 30 per cent of the UK’s population, in London and the surrounding regions.

Macquarie has reduced its stake in Thames gradually through share sales in recent years. The bank’s investment is held in funds managed by Macquarie Infrastructure and Real Assets (MIRA) that typically invest over 10 to 12 years. The main stake in Thames Water is held in an infrastructure fund that is now mature and expected to start realising assets, and is targeted to end in 2018.

“We remain focused on delivering first class water and sewerage services to our 15 million customers throughout the sale process,” a spokesman for Thames Water said. Macquarie declined to comment.

In February, the utility announced work had begun on a huge floating solar array, equivalent to eight Wembley football pitches. Just over 23,000 solar photovoltaic (PV) panels will be floated on the reservoir near Walton-on-Thames.

The project will have a total installed peak capacity of 6.3 megawatts, and should generate enough energy to power 1,800 homes in its first year.