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“Whilst today’s news is disappointing, we continue to believe
that a sustainable recapitalization of the company is in the
best interests of all stakeholders and continue to work with our
creditors and stakeholders to achieve that goal,” Thames Water
chairman Arian Montague said.
The cash-strapped company, which provides water and sewage
services to 16 million people in and around London, has teetered
on the edge of insolvency under about 19 billion pounds ($26
billion) in debt. The utility received court approval in March
for 3 billion pounds in emergency funding to keep it from
falling into government administration.
KKR’s withdrawal makes it more likely the British government
will have to nationalize the company, at least temporarily.
Environment Secretary Steve Reed said the government was
“monitoring the situation,” but “Thames (Water) itself remains
stable.”
Thames Water is the focus of nationwide anger over sewage spills
that have fouled lakes, rivers and beaches at a time when water
and sewage companies are hiking bills to modernize aging systems
and cope with the demands of climate change and population
growth.
Last week the company was fined almost 123 million pounds ($166
million) for releasing sewage into rivers and streams while
paying dividends to its shareholders.
Consumers and politicians have criticized the company, arguing
Thames Water created its own problems by paying overly generous
dividends to investors and high salaries to executives while
failing to invest in pipelines, pumps and reservoirs.
Company executives say the fault lies with regulators, which
kept bills too low for too long, starving the company of vital
cash to fund improvements.
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