- Sir Adrian Montague appointed as chairman of troubled Thames Water
- Immediate priorities: Reassuring stakeholders and securing fresh equity capital
- Additional billions required to meet regulatory requirements, concerns ripple across water sector
Sir Adrian Montague was appointed days after chief executive Sarah Bentley resigned, leaving the company temporarily without a leader.
Thames Water has appointed industry veteran Sir Adrian Montague as chairman to restore public and investor confidence in the troubled utility provider.
Sir Adrian, the former chairman of Anglian Water and insurance titan Aviva, will succeed Ian Marchant, who announced in April that he would step down at the end of this month.
His appointment, which was first reported by The Times, comes just days after chief executive Sarah Bentley abruptly resigned this week, leaving a leadership void at the company and intensifying concerns about its viability.
Following Ms. Bentley’s departure, Ministers and the water regulator Ofwat were contemplating contingency plans for the company’s collapse, including taking it under state control via a special administration regime.
Sir Adrian stated, “It is an honor to join the Thames Water Board and succeed Ian as chairman.”
I thoroughly enjoyed my previous position in the water industry and am excited to rejoin the sector at a crucial time given its current challenges.
“I now look forward to working with the Board and Executive team, as well as Thames Water’s regulators and investors, to focus on the company’s turnaround plan and its future financing needs to ensure it fulfills its obligations to serve its customers, communities, and the environment well.”
Sir Adrian, 75, has dealt with the repercussions of previous botched privatizations, having been appointed chairman of British Energy after a financial crisis at the nuclear operator and vice chairman of Network Rail after the demise of Railtrack.
His immediate responsibilities at Thames Water will be to reassure ministers and Ofwat about the company’s financial health and to persuade shareholders to honor their pledge to provide £1 billion in fresh equity capital.
The company announced a year ago that it intended to raise £1.5 billion from shareholders to finance investments in “leakage and river health,” with £500 million already committed and an additional £1 billion “subject to certain conditions.
Thames Water stated this week that it is working “constructively” with shareholders to secure the investment. Including Canadian and British pension funds as well as Chinese and Abu Dhabi sovereign wealth vehicles.
The corporation will use the extra money to undertake a £11 billion leak and pollution repair programme by 2025. However, regulatory regulations may demand billions more.
At mid-afternoon, United Utilities was down 3%, Severn Trent was down 5%, and Pennin, which serves consumers in the southwest, was down around 5%, all due to concerns about Thames Water.
Ofwat stated in a statement, “The sector continues to attract international capital and is particularly attractive to long-term investors like pension funds.” Since 2020, corporations have invested £2 billion in equity to enhance their finances.
“Ofwat will continue to keep a close eye on the financial resiliency of companies and work with them to ensure they take the necessary steps to ensure they have the financial resources to deliver for customers and the environment.”
