LONDON’S BUSINESS NEWSPAPER
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REGULATOR: MORE WATER STRIFE AHEAD
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RAIN STOPS PLAY Wimbledon hit by rain on first week of play
OFWAT: WE DIDN’T HAVE POWERS TO STEP IN ON DEBT NICHOLAS EARL WATER suppliers will not be allowed to rack up debts and underinvest again following Thames Water’s financial troubles, the boss of industry watchdog Ofwat vowed yesterday. Chief executive David Black (pictured) told the House of Lords yesterday that it can now “stop dividends” and “lock cash coming out of companies” if water firms are not in robust financial shape. However, he stopped short of ruling out further suppliers reporting financial troubles in an industry weighed down by a £65bn debt pile – with Thames Water just one of multiple water companies burdened with debt. “We have got the safeguards to stop the cash moving out of companies [but] clearly, we’ve got companies in positions that do require injections of equity. We still have the legacy of
those past issues to address,” Black admitted. Thames Water, he said, required “substantial sums of money” to get its house in order. Black told the industry regulators committee that Ofwat “should have stepped in to stop companies gearing up” with debts as early as 2007 – when Kemble Holdings, a consortium then led by Australian finance giant Macquarie snapped up Thames Water in an £8bn deal – but that the regulator lacked the power to do so. Ofwat, which has been criticised for being too cosy with the industry, said it now had more of a mandate to questions suppliers over debt levels. Numerous industry execs, including the new co-CEO of Thames Water, previously worked at the regulator. Black admitted that “regulators across all sectors took a relatively hands-off approach to gearing up companies”, including also the energy sec-
tor – which has suffered its own domestic crisis. Ofwat’s attendance at a Westminster committee session comes amid escalating chaos at the UK’s largest supplier Thames Water, which is home to 15m customers across London and south east England. Thames Water announced a boardroom exodus last week, with chief executive Sarah Bentley abruptly stepping down, followed by chairman Ian Marchant. It is struggling to tame a £14bn debt pile and is scrambling for £1bn in funds from stakeholders to stop the company falling into administration, with the supplier well behind on its turnaround plans as it battles with sewage leaks and overspills. Thames Water was hit with yet another fine yesterday – a £3.3m levy handed down after undiluted sewage was pumped into rivers near Gatwick Airport six years ago. The firm has been fined more than £35m for pollution incidents between 2017 and 2023.
MATT HARDY PUNTERS received a refund for yesterday’s lack of action at the All England Club as Wimbledon was ambushed by rain. The two-week festival of tennis has not got off to a great start with each of the opening two days hit by showers. But there is hope for later in the week with weather expected to improve by the weekend.
Wimbledon is a huge draw for the capital with the City of London benefiting from the tournament in terms of tourism, sponsorship and local business. Those lucky enough to be at the All England Club today are likely to see British sensation Jodie Burrage, defending champion Novak Djokovic and women’s No1 Iga Swiatek. The tournament delivers over £200m to the London economy.
Sir Jim takes aim at competition regulator as ‘hostile to business’ after deal nixed JACK MENDEL INEOS chair Sir Jim Ratcliffe has lashed out at Britain’s competition watchdog for being “increasingly hostile” to business – after it blocked a near £800m deal involving his firm. The business titan, who founded the private chemicals giant, made
his comments after the Competition and Markets Authority (CMA) prevented INEOS’s acquisition of Sika, a concrete additives business. The CMA has increasingly come in for criticism for blocking both Microsoft’s acquisition of Activision Blizzard and Adobe’s bid to buy Figma.
Last month, there was speculation the CMA would look into Vodafone and Three’s major tie up, while it blocked a series of deals, including for a hearing aid giant. INEOS agreed to buy the firm in January, and the pair jointly submitted the deal to the
CMA in March, receiving a negative response just nine days later. Ratcliffe said the CMA was “building a reputation as an overly aggressive regulator with little regard for the impact of its
decisions on UK business.” He claimed “the CMA and UK government are becoming increasingly hostile to business”. A CMA spokesperson told City A.M. that “effective merger control is pro-business and pro-growth” and said the INEOS deal raised competition concerns.
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