Environment secretary says Thames Water has ‘a number’ of options
Environment secretary Steve Reed told LBC’s Nick Ferrari that there are “a number” of potential investors for Thames Water, just minutes after news broke that US private equity firm KKR had dropped out of a last ditch effort to save the embattled water giant.
Reed had already been booked to appear for a ‘Call the Cabinet’ phone-in appearance on the London-based radio station.
“Thames itself remains stable. The government is clearly keeping a close eye on what’s going on.
“We’re monitoring the situation, but there’s no disruption to water supply. Thames have got a number of options that they’re exploring.”
On what options Thames Water is exploring, Reed reiterated: “There are a number of people that they are talking to. It’s for them, not for me to oversee those conversations.”
Reed denied that Tuesday morning’s development moves Thames Water closer to nationalisation, saying that there “has to be certain circumstances applying before that would happen”.
“The government is ready for any eventuality, but as things stand, Thames Water are a stable ongoing company.”
When pressed on a worst case scenario for Thames Water, Reed said: “If the circumstances happened with any company, any water company, where there was a breach and it would need to be put into special administration, that would happen.”
“But, as things stand, that’s not applying to any company right now.”
Emergency control?
Thames Water described the decision from KKR to pull out of the equity raise as “disappointing”, its chairman Sir Adrian Montague insisted that “we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal”.
The water giant has been under mounting financial pressure from a huge £19bn debt pile, made worse in May as watchdog Ofwat slapped the firm with a historic £123m fine.
Meanwhile, more than 80 criminal investigations have been launched into water firms for breaches of environmental laws – which could leave bosses facing five year jail sentences.
On a timeline for next steps for Thames Water, the environment secretary said: “Again, that’s in their hands. They’re a private company, they’re not part of the government, so it’s for them to do it.”
“We’ll keep an eye on what they’re doing, but I know they have a number of options on the table.”
He added: “We’re monitoring the situation, and my interest will always be to make sure that the company is stable, and that there’s not going to be a disruption to the water supply, which is the thing that concerns consumers, of course.”