Chief finance officer of under-fire Thames Water quits £1.3m-a-year role
Alastair Cochran, who had also recently served as interim chief executive at Thames, will leave his role within days. His departure comes at a critical time for the UK's largest water company amid close scrutiny of its fragile finances.
It is currently staving off insolvency after agreeing to take on billions more debt from its creditors after a court ruling earlier this month, as it seeks to secure fresh equity funding for its operations by the end of June.
Industry sources said it may prove even more challenging for the company to manage its operations and due diligence requirements for potential bidders without an experienced chief financial officer in place.
Thames said that Stuart Thom, director of group finance, would serve as interim CFO 'whilst longer term arrangements are put in place'.
The company, which serves 16 million customers in London and the Thames Valley, would have gone into insolvency and temporary nationalisation had it not secured the fresh debt funding of £3bn, which took its total debts to more than £20bn. If it had collapsed at the end of this month it would have had just £39m left, according to court documents.
Thames Water said in a statement that Cochran would step down from the board of the company as well as his executive post by this coming Monday, 31 March. It added that his replacement would be appointed 'in due course'.
Cochran's pay packet faced criticism along with those of other senior water executives, amid public anger over the state of England's water ways. His basic salary in 2024 was £450,000 plus a bonus of £446,000 and other benefits, which took his total annual earnings to £1.3m.
Sir Adrian Montague, Thames' chair said Cochran had 'led the work to put TWUL's [Thames Water Utility Ltd] finances on a more stable footing, overseeing the first stages of our equity raise and financial restructuring, laying the foundations for the wholesale recapitalisation of the business'.
Cochran joined Thames in 2021, and served as co-interim chief executive between June 2023 and January 2024 before resuming the role of chief financial officer. Before joining the water company he was chief financial officer of the oil multinational Petrofac.
Last year, the Guardian reported internal criticisms of Cochran's time at Thames, which included allegations by current and former staff that he had slowed down time-critical decisions for the water company's operations in areas such as ordering chemicals and hiring decisions. The company pushed back on these allegations, saying that Cochran only formally signed off on sums over £10m.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Thames is reviewing six approaches from potential suitors including CK Infrastructure Holdings, Castle Water, and the private equity firm KKR. The majority of bidders are seeking reassurance that they would be able to avoid or manage future fines and punishments for poor performance.
The Guardian also revealed earlier this month that Thames had asked the water regulator, Ofwat, to delay referring its decision on what bill rises the company was allowed to impose on consumers to the Competition and Markets Authority. It also requested special treatment on fines and other regulatory oversight.
Ofwat agreed to Thames's request to delay the referral after concerns emerged that waiting for the CMA decision could add months of uncertainty for investors trying to get a clear sense of Thames's financial position.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Rhyl Journal
16 hours ago
- Rhyl Journal
More businesses forced to close in July as cost pressures mount
Official data from the Insolvency Service showed there were 2,081 company insolvencies in July, edging up by 1% compared with June. The number of compulsory liquidations was slightly higher than in June and up 11% compared with the same month in 2024. Compulsory liquidations happen when a company is forced to close when it cannot pay money owed to creditors. July's figure was also a quarter higher than the monthly average across 2024, the data showed. The level of firms facing insolvency has remained elevated since reaching a 30-year annual high in 2023. Construction firms continue to come under the most pressure, with 3,984 insolvencies in the 12 months to July – making up 17% of all cases. This is followed by wholesale and retailers, who made up 16% of all company insolvencies. Experts said firms are being challenged by 'relentless uncertainty' in the global economic environment. Simon Edel, UK turnaround and restructuring strategy partner at EY-Parthenon, said: 'Many businesses are also contending with higher costs including recent increases to employer national insurance contributions and the national living wage. 'With interest rates still relatively high – alongside significant working capital demands and a constrained credit environment – liquidity pressures are intensifying for more UK companies. 'This is causing more businesses and stakeholders to call time.' Freddy Khalaschi, business recovery partner at Menzies, said: 'The summer heat is bearing down on British businesses. 'Thames Water's reserves are drying up, Claire's has fallen into administration, River Island narrowly avoided the same fate after the court agreed a restructuring plan, and more than 1,000 pubs and restaurants have gone under since the last Budget. 'Consumer confidence remains fragile, house prices are falling and falling job vacancies suggest that businesses are cutting back, with hiring costs rising and with AI and automation starting to make their presence felt.'
South Wales Guardian
a day ago
- South Wales Guardian
More businesses forced to close in July as cost pressures mount
Official data from the Insolvency Service showed there were 2,081 company insolvencies in July, edging up by 1% compared with June. The number of compulsory liquidations was slightly higher than in June and up 11% compared with the same month in 2024. Compulsory liquidations happen when a company is forced to close when it cannot pay money owed to creditors. July's figure was also a quarter higher than the monthly average across 2024, the data showed. The level of firms facing insolvency has remained elevated since reaching a 30-year annual high in 2023. Construction firms continue to come under the most pressure, with 3,984 insolvencies in the 12 months to July – making up 17% of all cases. This is followed by wholesale and retailers, who made up 16% of all company insolvencies. Experts said firms are being challenged by 'relentless uncertainty' in the global economic environment. Simon Edel, UK turnaround and restructuring strategy partner at EY-Parthenon, said: 'Many businesses are also contending with higher costs including recent increases to employer national insurance contributions and the national living wage. 'With interest rates still relatively high – alongside significant working capital demands and a constrained credit environment – liquidity pressures are intensifying for more UK companies. 'This is causing more businesses and stakeholders to call time.' Freddy Khalaschi, business recovery partner at Menzies, said: 'The summer heat is bearing down on British businesses. 'Thames Water's reserves are drying up, Claire's has fallen into administration, River Island narrowly avoided the same fate after the court agreed a restructuring plan, and more than 1,000 pubs and restaurants have gone under since the last Budget. 'Consumer confidence remains fragile, house prices are falling and falling job vacancies suggest that businesses are cutting back, with hiring costs rising and with AI and automation starting to make their presence felt.'
The Guardian
a day ago
- The Guardian
Thames Water creditor compares UK to Puerto Rico over treatment of lenders
The largest creditor to struggling water company Thames Water has said it is confident that it will not lose money, joking that the UK was comparable to Puerto Rico, which paid lenders to its water company despite a crippling debt crisis. Dominic Frederico, the boss of US insurer Assured Guaranty, suggested that the UK government would not impose losses on creditors. The company – with an exposure of $2.4bn (£1.8bn) to Thames Water's bonds – was 'well protected in terms of the legal structure' from losing money, he told investors on a call on 8 August. 'The joke I make internally, and I'll put it out here over some criticism, is that even in Puerto Rico's case, they paid the water bill,' he said. 'So I'm assuming the UK government will do the same.' Puerto Rico, a US territory, went through the biggest municipal default in modern history, beginning in 2014. However, its water company debts were not hit, preserving returns for investors. The comments underline the scale of Thames Water's crisis, as well as the expectation of some its senior creditors that they will not lose their money. Thames Water has been under the effective control of its senior creditors, which hold the bulk of its £17.7bn debt pile since shareholders walked away from the company last year. The creditors have proposed a £5.3bn injection of equity and debt to take formal control of Thames Water and try to turn it around. However, the creditors insist that no recovery is possible without leniency on pollution fines from Ofwat, the water regulator for England and Wales. That proposal is deeply controversial and has led to a stand-off, with the environment secretary, Steve Reed, insisting that Thames Water must continue to meet the same environmental standards as rivals. The government has faced calls for it to place Thames Water into special administration, effectively a temporary nationalisation which would probably impose significant losses on creditors. However, Assured Guaranty has said that it is confident it will not lose money, and that Thames Water will stay out of government control. Frederico said that he was 'very comfortable' that the creditor plan would be approved. Assured Guaranty's exposure to UK water companies has risen to more than $16bn in June, up from $10.6bn in March 2022, according to quarterly filings. Its biggest exposure was $2.8bn on Southern Water, another British water company that has faced financial difficulties. The insurer has said that it feels 'pretty good' about its exposure to Britain's privatised water companies. Its chief financial officer, Benjamin Rosenblum, said in February: 'The UK government has stated that they really don't plan to nationalise the water utilities and frankly, they don't really seem to have the room in their budget to do so, and they would like to see additional investment. So I think the macroeconomic background for the UK water sector looks pretty good.' Dieter Helm, an Oxford University professor who has advised previous Labour and Conservative governments on energy and water policy, said this week that the creditor offer was 'a plan designed to protect their debt' and that it did not appear to address Thames Water's long-term problems. Helm said that 'Thames is, in principle, a very viable asset' because of rising bills that guarantee revenues but added that creditors are not likely to back debt write-offs that would impose losses on themselves. Several of the creditors bought the debt at a discount from the original lenders, meaning they could still make large profits even with a large cut in the amount Thames owes. A Thames Water spokesperson said: 'A special administration regime doesn't fix Thames Water's problems. It will delay the delivery of improvement for our customers and the environment. It will be disruptive, add risk and uncertainty, increase costs, hinder our operational turnaround, destabilise our stakeholders and colleagues, and will not fix the balance sheet. 'A market-led recapitalisation is the quickest and most effective route to financial stability, sustainable investment and better outcomes for customers and the environment.' Assured Guaranty and the Thames Water senior creditor group were approached for comment.
