Latest news with #AlastairCochran
Yahoo
31-03-2025
- Business
- Yahoo
‘Barbarians at the gates' come for Thames Water
A US private equity firm is in pole position to buy Thames Water as the embattled utility tries to stave off a looming cash crunch. New York-based KKR, whose staff were once dubbed 'barbarians at the gates' for their aggressive culture, has entered the second stage of negotiations over a potential cash injection that would help the company avoid collapse. However, Thames Water said there was no certainty that a deal would be reached as it remained subject to due diligence and regulatory approvals. A takeover of Thames by KKR would reduce the risk that the utility requires a government-backed bailout if it runs out of cash. Bosses said senior creditors, which include hedge funds Elliott and Apollo, are continuing separate discussions over an equity raise in case the deal falls through. Thames, which serves 16m customers across London and the South East, recently agreed a £3bn emergency loan from its creditors. But the company, which is struggling under debts of roughly £20bn, is now seeking billions of pounds in fresh equity to shore up its finances and avoid unprecedented renationalisation. Thames's existing shareholders, who include the sovereign wealth funds of China and Abu Dhabi as well as the pension funds USS and Omer, last year walked away from the company, branding it 'uninvestable'. The apparent breakthrough comes days after Thames announced the surprise departure of its chief financial officer. The company last week said that Alastair Cochran, who has been at the company since 2021 and recently served as interim chief executive, will step down within days. The financial crisis at England's biggest water supplier comes amid public anger over rising bills and sewage leaks. Thames plans to raise average water bills by £31 a year, meaning the average annual household bill would jump from £436 to £588 between now and 2030. Bosses have argued the price rises are necessary to fund a £21bn investment in the company's crumbing Victorian infrastructure. But Thames has faced vocal opposition from rival creditors and campaigners including Charlie Maynard, the Liberal Democrat MP for Witney in Oxfordshire. Mr Maynard argued against the £3bn emergency loan, saying the Government should instead step in to nationalise the utility. He described the restructuring as 'simply throwing good money after bad'. KKR's selection as preferred bidder comes after it saw off competition from rival suitors, who are reported to have included Hong Kong giant CKI Infrastructure, UK-based Castle Water and a French consortium led by Covalis. Thames said KKR's proposal included financial metrics that indicate a 'material impairment' of the company's class A debt, while other aspects of the deal remain under discussion. Thames Water said: 'The company remains focused on putting Thames Water on a more stable financial foundation, implementing its turnaround plan and delivering a market led solution that is in the best interests of customers, UK taxpayers and the wider economy. 'Agreed transaction terms are targeted for the second quarter of 2025 with a view to completing a recapitalisation in the second half of 2025.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
Telegraph
31-03-2025
- Business
- Telegraph
‘Barbarians at the gates' come for Thames Water
A US private equity firm is in pole position to buy Thames Water as the embattled utility tries to stave off a looming cash crunch. New York-based KKR, whose staff were once dubbed 'barbarians at the gates' for their aggressive culture, has entered the second stage of negotiations over a potential cash injection that would help the company avoid collapse. However, Thames Water said there was no certainty that a deal would be reached as it remained subject to due diligence and regulatory approvals. A takeover of Thames by KKR would reduce the risk that the utility requires a government-backed bailout if it runs out of cash. Bosses said senior creditors, which include hedge funds Elliott and Apollo, are continuing separate discussions over an equity raise in case the deal falls through. Thames, which serves 16m customers across London and the South East, recently agreed a £3bn emergency loan from its creditors. But the company, which is struggling under debts of roughly £20bn, is now seeking billions of pounds in fresh equity to shore up its finances and avoid unprecedented renationalisation. Thames's existing shareholders, who include the sovereign wealth funds of China and Abu Dhabi as well as the pension funds USS and Omer, last year walked away from the company, branding it 'uninvestable'. The apparent breakthrough comes days after Thames announced the surprise departure of its chief financial officer. The company last week said that Alastair Cochran, who has been at the company since 2021 and recently served as interim chief executive, will step down within days. The financial crisis at England's biggest water supplier comes amid public anger over rising bills and sewage leaks. Thames plans to raise average water bills by £31 a year, meaning the average annual household bill would jump from £436 to £588 between now and 2030. Bosses have argued the price rises are necessary to fund a £21bn investment in the company's crumbing Victorian infrastructure. But Thames has faced vocal opposition from rival creditors and campaigners including Charlie Maynard, the Liberal Democrat MP for Witney in Oxfordshire. Mr Maynard argued against the £3bn emergency loan, saying the Government should instead step in to nationalise the utility. He described the restructuring as 'simply throwing good money after bad'.
The Guardian
31-03-2025
- Business
- The Guardian
Thames Water names US private equity group KKR as ‘preferred partner'
Thames Water has picked the US investment firm KKR to take a stake in the business, as the embattled water company fights to stave off nationalisation. The UK's biggest water supplier, which is struggling under a debt pile of close to £20bn, said it had selected KKR as a 'preferred partner' as it seeks to secure fresh equity funding for its operations by the end of June. The New York-based private equity firm is expected to acquire a stake in Thames worth £4bn. The UK-based business water retailer Castle, with more than 250,000 customers, had also put in a bid for £4bn, Bloomberg News reported last week. Hong Kong-based CK Infrastructure Holdings, part of CK Hutchison, and London-based investment firm Covalis Capital were also among the bidders. Thames's chief financial officer had quit on Friday. Alastair Cochran, who had also recently served as interim co-chief executive at Thames, is leaving at a critical time, after Thames agreed to take on billions more debt from its creditors after a court ruling earlier this month. Thames, which serves 16 million customers in London and south-east England, said: 'The company remains focused on putting Thames Water on a more stable financial foundation, implementing its turnaround plan and delivering a market-led solution that is in the best interests of customers, UK taxpayers and the wider economy.' It expects to agree a deal with KKR – the private equity group that inspired the story of corporate greed, Barbarians at the Gate – by the end of June, and complete it in the second half of the year. It means that senior bondholders will take a hefty haircut on their loans, as expected. KKR's proposal will lead to a 'material impairment' of the company's class A debt and discussions continue in relation to other aspects of the proposal, Thames added. Most of the bidders were seeking reassurance that they would be able to avoid or manage future fines and punishments for poor performance. Two weeks ago, Thames won approval from the court of appeal for a £3bn emergency debt bailout from its existing creditors to avoid an immediate collapse into a special administration regime, a form of temporary nationalisation. 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 The company's future has been under intense scrutiny and there are concerns over the state of its ageing assets, which were the subject of a recent BBC documentary.
The Guardian
28-03-2025
- Business
- The Guardian
Chief finance officer of under-fire Thames Water quits £1.3m-a-year role
Thames Water's chief financial officer has quit his £1.3m-a-year job, the cash-strapped water company has announced. 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.
