How shareholders sucked billions of pounds out of Thames Water

Thames Water’s shareholders have sucked out billions of pounds from the company over the past two decades and piled the utility with huge debts. Australian bank Macquarie and a string of offshore pension funds bought Thames in 2006 and controlled the business as a consortium for a decade. Over that period, they took out about £2.7bn in dividends using a complex financial structure ultimately underpinned by money paid into Thames Water by bill payers. In one year alone, Thames paid a £656m dividend – pushing the group into the red. During the most prolific periods, shareholders sucked out another £1.3bn between 2010 and 2014. In the final year of ownership, the Macquarie-led consortium shared in a further £157m windfall as debts rose four-fold to £10bn from £2.3bn. Thames currently has net debts of around £14bn. The payouts rankled as rates for bill payers surged to pay for fixing faulty pipes and prevent sewage flooding into the Thames. Critics said the dividend payments should have been used to fix Thames Water’s creaking infrastructure. The company’s previous owner, the German utility giant RWE, also faced criticism for drawing large dividends – but these were typically of a lower size. Thames Water was...

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