Crisis-stricken Thames Water hires advisers
THAMES Water has hired the restructuring firm that worked on the special administration of Bulb Energy as it scrambles to stave off nationalisation.
The crisis-stricken water firm has appointed advisers at Teneo as it confronts an imminent financial crisis.
Concerns are growing that the UK’S largest water company, which serves 15 million people, could be taken over by the Government in a special administration amid a standoff between its shareholders and the water regulator.
Teneo, whose appointment was first reported by The Guardian, was a key player in the emergency nationalisation of Bulb Energy when it collapsed because of soaring wholesale gas prices in 2021. The City firm, which counts the former Tory leader Lord Hague as an adviser, is now in pole position to be appointed as the official administrator should Thames Water be nationalised.
A source close to the matter said it was not yet clear if a special administration might happen. Renationalising the company could cost the taxpayer as much as £5bn, it has been estimated, and ministers are keen to avoid a costly failure in an election year.
Mark Spencer, the farming minister, told the Commons last month it was “important to make clear that it is for the company and its investors to manage the company’s financial resilience”.
Teneo’s appointment comes after the consortium of pension funds and foreign states that own Thames Water’s parent company, Kemble, said they would not give the company a promised £500m lifeline. It followed a disagreement with the watchdog Ofwat over fines, dividends and how much Thames could charge its customers.
The cancelled cash injection was part of a planned £3.75bn funding package designed to see it through to 2030. But the consortium had demanded that Thames Water increase household bills by 40pc in return for the cash.
Thames Water and Teneo declined to comment. The Department for Environment, Food & Rural Affairs said: “We prepare for a range of scenarios across our regulated industries.”