Thames Water agrees payment plan with Ofwat for historic fine
Thames Water has agreed a payment plan with Ofwat for its £123m fine over rule breaches tied to its wastewater operations and dividend payouts.
The payment plan will see 20 per cent of the total penalty – £24.5m – paid no later than 30 September this year.
The penalty will not be funded by customer bills, Thames Water said.
In May, Ofwat confirmed that the company and its shareholders had to pay a £104.5m penalty for overseeing a “significant” breach of its legal obligations regarding wastewater, as well as an additional £18.2m for breaching rules related to dividend payouts.
The wastewater breach caused an “unacceptable impact on the environment and customers,” Ofwat said.
The full penalty balance has to be paid on the earliest of three possible events: By March 31 2030, 30 calendar days after the implementation of the company’s restructuring plan, or if the company enters the Special Administration Regime.
Thames Water is currently at the centre of a public backlash against the water sector, blamed for polluting Britain’s river and seas.
It has faced fierce backlash for maintaining significant bonus and dividend payouts in spite of its financial issues and soaring sewage spills.
“This payment plan continues to hold Thames Water to account for their failures but also recognises the ongoing equity raise and recapitalisation process,” Lynn Parker, senior director of Enforcement at Ofwat told Reuters.
Thames Water said in its statement it “continues to work closely with stakeholders to secure a market-led recapitalisation”, which involves its creditors investing new equity and taking a haircut on debt.
Thames Water’s restructuring plan was approved by the High Ciurt in February this year, although it still faces a race against time to avoid collapse.
The government remains on standby to put it into its special administration regime (SAR) should it fail to agree a deal.