Thames Water spent £136m on securing emergency funding, leaked document suggests | Thames Water
The Water Thames spent at least 136 million pounds sterling to obtain emergency financing over 12 months, according to a disclosed document which suggests that the costs exceeded 130 million pounds sterling that the public service in difficulty paid in fines.
Lawyers Linklaters and Akin Gump respectively received 45 million pounds Sterling and 26 million pounds in the fiscal year until March 2025, and 10 other companies were paid more than 1 million pounds sterling, according to a document listing “atypical spending” for the year, seen by The Guardian. This is the first time that the costs paid by Thames Water have been publicly detailed.
The Compagnie des Eaux rushed in the past year to obtain emergency funding in order to avoid temporary nationalization when it was struggling under a bunch of debts of 20 billion pounds sterling. This effort led to a confrontation in court in January and February to force losses on certain debt holders in exchange for a maximum of 3 billion pounds in cash to see this year.
The Thames, which quickly burns this money, is in talks with the regulator, ofwat, during a takeover by creditors who hold a large part of its debt, after the KKR investing capital company has moved away from an auction.
Landers, ranging from major institutional investors such as Aberdeen, Blackrock, Investco and M&G to American hedge funds, notably Elliott Management and Silver Point Capital, offer an injection of 5.3 billion pounds sterling in debt and equity. Creditors argue that they will need relief of future fines – and perhaps the overthrow of past fines – if they have to invest in the Thames, which provides water and sewer services to 16 million customers in London and south -east of England.
However, the figures show that the costs paid to the advisers in the process to refinance and sell the Thames – as part of the Project Crabtree codename – compete with the fines taken by OFWAT for wastewater spills and illegal dividend payments in the past year. Thames was forced to pay the costs for his own advisers and those of creditors, as usual in the restructuring processes.
The Thames was also criticized for refusing to recover millions of bonuses in bonuses paid to senior executives. The British water industry is also likely to be examined in the coming weeks, as heat waves lead to drought conditions in certain parts of the country. The Yorkshire Water and South East Water, covering Kent and Sussex, announced Hosepipe prohibitions last week.
The legal costs linked to Crabtree seem to be considerably greater than the previous estimate of Thames, which was provided in a letter of May 30 to Alistair Carmhael, the liberal deputy for the Democrats who chairs the environmental committee of the Parliament. In this letter, the director general of Thames Water, Chris Weston, wrote that the “legal costs” in relation to recapitalization were 67.6 million pounds sterling. However, the internal document suggests that the costs paid in Linklaters, Akin Gump, A & O Shearman and Quinn Emanuel totaled 79 million pounds Sterling that year. The Thames did not explain the disparity.
The AlixPartners, Bain, Deloitte, KPMG, Kroll and Teneo consultants were also paid collectively to 39 million pounds Sterling under exceptional spending during the year. Alixpartners received 12.8 million pounds sterling, including amounts not linked to recapitalization. Payments to the company continued after partner Julian GETHING was supported at Thames Water to act as a restructuring chief in December 2024. Jefferies bankers representing creditors received 3.1 million pounds sterling, while Rothschild received 1.5 million sterling books.
Persons close to the process said that fees reflected its complexity, involving a restructuring of billions of pounds, hundreds of creditors and the largest water company in the United Kingdom.
The highest legal costs have coincided with the judicial case. The documents suggest that Linklaters was paid 10.1 million pounds sterling in January 2025 and 5.5 million pounds sterling in February, while Akin Gump was paid 3 million pounds sterling, then 3.7 million pounds sterling.
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Thames Water and the creditors said that all costs related to recapitalization will be funded by lenders rather than customers. However, payment of costs represents money expenditure that could otherwise have been available for investments in the Thames infrastructure.
Ofwat has also said that customers will not bear the cost of the project of the project, arguing that its calculation of water bill increases does not take into account advice.
Charlie Maynard, a liberal democratic deputy, challenged the restructuring of the debt before the court, arguing that it would be preferable for invoices of invoices so that the company enters special administration – essentially a temporary nationalization. He drew attention to the high level of costs in court.
“It’s a massive boon for advisers,” said Maynard. “That these costs are directly placed on our invoices or loaded on the walking disaster which is the balance sheet of Thames Water, anyway, it is money. If customers do not pay, can we explain who is?”
A spokesperson for Thames Water said: “Customers will not pay these costs, and the costs relating to recapitalization will not lead to an increase in customer bills.
A spokesperson for the creditors said: “Creditors have submitted a recapitalization of 17 billion pounds sterling by Wames Water, which should represent the highest financial loss suffered by investors on an infrastructure asset in British history. Several billion books of debt will be struck off to restore financial resilience, improve environmental performance and restore customer confidence as quickly as possible, without risk of taxpayers. ” ».
Alixpartners, KPMG and Teneo refused to comment. The other advisers were approached for comments but had not responded at the time of publication.
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