Committee publication · Correspondence · 2 September 2025
Correspondence to Thames Water regarding its evidence to the Committee, dated 30 July 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
The EFRA Committee chair writes to Thames Water's chair requesting detailed clarification on takeover bid decisions, creditor involvement, recapitalisation financing, investment delivery, and management retention payments made in May 2025. The letter expresses concern over Thames Water's claims that customers won't bear super-senior loan interest costs and seeks documentation on board meetings, bid comparisons, and creditor track records.
Key findings
- Committee seeks comparative analysis of KKR and CKI bids and explanation why both were deemed 'not progressable' after KKR withdrew
- Thames Water claims customers will not pay interest on £1.5bn super-senior loan accruing at 9.75%, which the Committee describes as 'extraordinary'
- Discrepancy identified between £67.6m and £79m figures for legal fees associated with recapitalisation
- Thames Water made £2.46m Management Retention Plan payments without consulting Ofwat or the Secretary of State despite plan being 'paused'
- Committee requests clarification on creditor status as 'ultimate controller', their track record, and investment delivery against Ofwat's PR24 targets
Tone
CriticalTopics
Key actors
Sir Adrian Montague, Thames Water, KKR, CKI, Castle Water, Elliott, Ofwat, Alistair Carmichael MP
Notable line
“We were very disappointed to learn that you did indeed make the first round of payments worth £2.46 million without consulting Ofwat or the Secretary of State.”
Key Quotes
“You will appreciate that we found this extraordinary.”
“We were very disappointed to learn that you did indeed make the first round of payments worth £2.46 million without consulting Ofwat or the Secretary of State.”
Source · parliament.uk record ↗