Thames Water has confirmed it paid dividends worth £195.8 million last year, despite being heavily indebted and unlikely to raise new funds before December.
Struggling under a debt burden exceeding £15 billion, Thames Water stated that the dividends were allocated to support two of its financially troubled holding companies, Kemble Eurobond and Thames Water Limited.
In March, the company issued two new dividends totalling £158.3 million. The water industry regulator, Ofwat, had already indicated it is “minded” to take action against Thames Water for a smaller dividend payment of £37.5 million in October 2023.
New rules introduced last year prohibit water companies with poor financial and environmental records from paying dividends.
Thames Water continues to seek new funding after investors withdrew £500 million of emergency funding earlier this year, but the process is “not expected to conclude” until Ofwat makes a key decision on its business plan for the next five years in December.
