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Thameswater, a UK utility struggling with nearly £20 billion in debt, said Chief Financial Officer Alastair Cochran will step down later this month.
The utility, which serves 16 million people in London and Thames Valley, is facing a cash crunch that could leave it at just £39 million by the end of March, as suppliers step up quick payments.
I recently agreed to a £3 billion emergency loan from a senior creditor, but will not be able to start accessing the money by early April. The loan could also be subject to a Supreme Court assignment from rival creditor groups or environmentalists led by Liberal Democrat Charlie Maynard.
Thames Water chair Adrian Montagueu said Cochrane led the work to put the utility finances on a “more stable footing” and laid the foundation for “recapitalizing wholesale business.”
Group Finance director Stuart Thom is being asked to act as interim chief financial officer until a long-term replacement is found, the company said Friday. Cochrane, who has been with Thameswater since 2021, has also resigned from the utility’s board of directors. The company said it will announce its successor soon.
Cochrane’s departure was unexpected, but existing management teams, including CEO Chris Weston and the board, were widely leaning towards replacing them later this year as part of a recapitalization of water business capabilities. The bidder was expected to briefly describe the headhunter in the coming weeks, the person added.
Another person close to business said that everyone wants to “draw a line under the past.” “If Cochran hadn’t been there anymore, he would have gone later,” the person said.
Cochrane’s exit is because the company is trying to raise billions of pounds of equity to avoid being taken over by the government under a special management scheme.
Sovereign funds in China and Abu Dhabi, as well as existing shareholders, including pension funds USS and Oma, declared they could no longer invest in the business last year.
Potential bidders so far include KKR, CKI Infrastructure, Castle Water and Covalis, with a list of candidates scheduled for next week. Thames Water hopes that deals will be agreed in June ahead of the final restructuring through September. However, there were indications that some bidders were seeking generosity over regulatory fines and other measures as part of their transaction.
Representing the company’s £12 billion debt, creditors including hedge funds Elliott and Silver Point, as well as well as well-known names M&G and BlackRock, have said they will trade stocks if other bids fail to materialise.
The £3 billion loan is priced at an expensive 9.75% interest rate, fees and Thames water is expected to sacrifice at least £800 million in interest. Approximately £15 million per month is leaked from the business when paying creditors’ fees. This is part of a wide range of bills from lawyers, consultants and advisors engaged in the restructuring process.
The Company and its creditors are trying to avoid religious statistics under the government’s special administrative government. In that case, the interest on the debt will be frozen and cash will be released for investment in the infrastructure until a new buyer is found.
Thames Water acknowledges that its aging assets pose a “public safety risk,” but it acknowledges that most of its sewage treatment plants are incapable of addressing the needs of local residents.
That customer has seen an average household bill increase from £151 to £639 since April, with an increase of 31% invoices, which will rise further over the next five years.
Maynard asked Environment Secretary Steve Reed on Friday to ask the court to lead the company to special management.
Cochrane’s departure made the Thames water location “more unacceptable than ever,” said Lib Dem MP.
