Sky News is reporting that Ofwat has informed Thames Water it is minded to fine the company £40 million-plus for paying £37.5 million to shareholders in breach of rules governing dividend payments.
In December last year Ofwat confirmed it was looking into the payment by Thames Water of a £37.5 million dividend payment to shareholders – the payment was set out in Thames Water Utilities Ltd (TWUL) interim results for the six months period to 30 September 2023.
Ofwat said in December it would need to thoroughly review the information provided by the company before determining the appropriate action to take. According to Sky, before the regulator comes to a final decision Thames Water will have the right of appeal.
In October 2023, following the period end, TWUL paid dividends of £37.5 million to Thames Water Utilities Holdings Ltd. These proceeds were subsequently distributed by TWUL to Thames Water Ltd and then through to Kemble Water Finance Ltd which retained the proceeds to service both its own and its subsidiary Thames Water (Kemble) Finance plc’s external debt obligations.
The Sky News article comments:
“The fine being considered by Ofwat is notable because it is larger than the £37.5m payout made to shareholders last autumn, according to a Thames Water insider.”
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