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The GMB union has called for the government to take a stake in Thames Water following the news that Macquarie Group intends to sell its holding in the utility.
The Australian infrastructure fund is preparing to divest its 26 per cent shareholding in Thames for as much as £3 billion, it has been reported in the national media.
The GMB said it was an ideal opportunity for the government to set a strategic direction for the water industry.
GMB lead officer for the water industry, Eamon O’Hearn Large, said: “The decision from Macquarie to divest its stake in Thames Water is the perfect chance for government to set the strategic and operational direction of the water industry.
“The active involvement of government in the UK’s largest water company could ensure that long-term decisions are taken in the best interests of UK customers and the workforce without the need to satisfy ever-increasing levels of debt repayments to foreign-based investors.
“If the government is serious about tackling offshore investments and structures designed to minimise tax then it could start by addressing the complexity of the water industry companies, many of which make the Panama papers appear simple by comparison.”
Macquarie has reportedly hired investment bank Nomura to find a buyer for its Thames shares. It is understood that Thames’s existing shareholders – which include the BT pension fund, the Abu Dhabi Investment Authority and the China Investment Corporation – will be given the chance to buy extra shares ahead of external buyers.
Thames Water confirmed the news of Macquarie’s impending sale. “We remain focused on delivering first class water and sewerage services to our 15 million customers throughout the sales process,” it added in a statement.
Thames was bought for £8 billion from German firm RWE in 2006, by Kemble Water – a consortium of pensions and investment funds led by Macquarie.
Part of the expected £3 billion proceeds from the sale will be used to reduce Thames’ debts, with the rest going to Macquarie and its partners.
Thames invests about £1 billion a year upgrading its sites and pipes. It supplies around 2,600 million litres of tap water to 9M customers across London and the Thames Valley, as well as removing and treating more than 4 billion litres of sewage for 15 million customers.
A version of this story first appeared on wwtonline.co.uk
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