Thames Water has appointed industry veteran Sir Adrian Montague as chairman as the troubled utility provider seeks to shore up public and investor confidence.
The former chairman of Anglian Water and insurance giant Aviva, Sir Adrian will replace current chairman Ian Marchant, who announced in April that he would stand down at the end of this month.
His appointment, first reported by The Times, comes just days after chief executive Sarah Bentley stood down without explanation this week, leaving a leadership vacuum at the company and heightening concerns about its viability.
Following Ms Bentley’s departure Sky News revealed that ministers and water regulator Ofwat were considering contingency plans in the event of the company collapsing, including effectively taking it into state control through a special administration regime.
Sir Adrian said: “It is a privilege to join the Board of Thames Water and follow Ian as chairman.
“I very much enjoyed my previous role in the water industry and am pleased to be re-joining the sector at a critical time given the challenges it currently faces.
“I now look forward to working with the Board and Executive team and Thames Water’s regulators and investors, to focus on the company’s turnaround plan and its future financing needs to ensure it delivers on its responsibilities to serve its customers and communities well and benefit the environment.”
Sir Adrian, 75, has experience tackling the consequences of previous failed privatisations, having been appointed chairman of British Energy following a financial crisis at the nuclear operator, and deputy chairman of Network Rail following the collapse of Railtrack.
His immediate tasks at Thames Water will be to reassure ministers and Ofwat about its financial position and encourage shareholders to make good on a commitment to provide £1bn in fresh equity capital.
The company said a year ago it planned to raise £1.5bn from shareholders to fund investments in “leakage and river health”, with £500m already committed and another £1bn “subject to certain conditions”.
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Thames Water said this week it is working “constructively” with shareholders, including Canadian and British pension funds and Chinese and Abu Dhabi sovereign wealth vehicles, to secure the investment.
The company says the additional capital will be used to fund an £11bn program of works to address leaks and pollution by 2025, but there are reports that billions more will be required to meet regulatory requirements.
Concern over Thames Water saw shares in three listed water companies fall, with United Utilities down 3% and Severn Trent and Pennin, which serves customers in the south west, both down around 5% in mid-afternoon.
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In a statement Ofwat said: “Overall, the sector is continuing to attract international capital and is especially attractive to long term investors such as pension funds. Indeed, there has been an additional equity injection of around £2bn since 2020, with companies acting to strengthen their financial position.
“Ofwat will continue to keep companies’ financial resilience under close scrutiny and work with companies to ensure they take action to ensure that they have the financial backing to deliver for customers and the environment.”