Thames Water’s owner could be worth £1.4billion less than before after its largest investor slashed the value of its stake.
The Ontario Municipal Employees’ Retirement System (Omers), which owns a third of the troubled supplier through multiple funds, significantly reduced the value of its investment last year, according to The Financial Times.
One of those funds, Omers Farmoor Singapore PTE, cut the value of its 20 per cent stake in Thames Water’s parent Kemble from £979million to £700million.
A similar write-down across the rest of Thames Water’s ownership could amount to around £1.4billion.
It comes amid mounting scrutiny of its finances, which have raised concerns due to a £14billion debt mountain.
Flushed away: The Ontario Municipal Employees’ Retirement System, which owns a third of Thames Water significantly reduced its stake last year
The company confirmed earlier this month that shareholders, which includes the Universities Superannuation Scheme and the China Investment Corporation, agreed to inject £750million into the business.
But this was alongside a warning that a further £2.5billion of investor support will be required by 2030.
Experts are suggesting that other shareholders could be forced to recognise losses on their investments in Thames Water – potentially making it harder for the company to raise fresh funds from them.
Thames Water has been criticised over the past year for polluting rivers and failing to fix leaky pipes.
Analysts at RBC Capital Markets said: ‘It is unsurprising that a stake in Thames Water would have been written down given challenges faced by the business prior to recent events.’
Talk of the supplier entering a so-called special administration has been ongoing since the unexpected departure of chief executive Sarah Bentley last month.
Thames Water recently revealed that revenues rose 4 per cent to £2.3billion last year, while losses hit £82.6million due to higher operating costs.
The firm’s £14billion debt has also led to greater financing charges due to rising interest rates.
A Thames Water spokesman said: ‘Our shareholders have consistently been very supportive of Thames Water by approving investment in the business over and above regulatory allowances, foregoing any income since 2017 and investing £500million of new equity funding in March 2023.’
Omers declined to comment.
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