Macquarie emerges as a lender to Thames Water parent

9th Apr 2024 11:26

(Sharecast News) - Australian investment bank Macquarie emerged as one of the lenders involved in Thames Water's financial struggles on Tuesday, seven years after its ownership of the utility ended.

Thames Water's parent company, Kemble Water Finance, defaulted on its debt last week, prompting speculation about a potential restructuring or even collapse for the water supplier.

Macquarie's renewed involvement in Thames Water's affairs was, according to the Guardian, likely to reignite controversy, given its history with the company.

The newspaper said critics had accused Macquarie of burdening Thames Water with excessive debt and neglecting necessary investments during its ownership of the company from 2006 to 2017, despite sizable dividends.

However, Macquarie defended its actions, citing substantial investments of more than £11bn in Thames Water's infrastructure during its ownership tenure.

The group of lenders to Kemble also included institutions such as ING, Allied Irish Banks (AIB), and Chinese state-owned entities Bank of China and Industrial and Commercial Bank of China (ICBC).

Kemble faced a looming £190m loan repayment deadline, but negotiations for an extension with the banks were underway.

Macquarie's specific investments in Kemble's debt, totaling around £130m in 2018 and 2020, represented about 9% of the company's debt instruments and were separate from the imminent repayment obligation.

The Guardian quoted a Macquarie spokesman as emphasising the bank's role in managing debt investments for long-term institutional investors in essential infrastructure projects.

They also clarified that Macquarie had not exerted control or influence over Thames Water's operations since 2017.

Reporting by Josh White for Sharecast.com.