Macquarie, a financial group based in Australia, is a member of the consortium that lends to Thames Water parent company Kemble Water Finance.
The fate of the struggling utility could be decided by the lenders last week, including two Chinese state-owned bank, the Dutch ING and Allied Irish Bank.
The disclosure of Macquarie’s involvement may lead to a new political dispute. Politicians have criticised the former Thames Water investor for saddling it with debt. However, the infrastructure fund has defended their stewardship over the utility.
Kemble is due to repay a £190m loan at the end this month. Abu Dhabi sovereign funds as well Canadian and UK pension funds have warned the company’s investors that they will not be able to repay their loan.
The shareholders have been embroiled in an intense dispute with Ofwat (the water regulator) over the payment of dividends to Thames Water’s parent company and the proposed increase in bills by 56 percent.
Macquarie investors have been reported to have loaned Kemble around £130 million between 2018 and 2020. This represents about 9 percent of Kemble’s debt.
These loans are managed through Macquarie’s private credit fund, which lends to infrastructure companies in the UK, Europe, and North America on behalf of institutional investors such as pension funds and insurance firms. This lending was made after Macquarie sold its 26 percent stake in Thames Water.
Macquarie stated: “We manage long-term debt investments for institutional investors, providing financing of essential infrastructure. Macquarie does not have any influence or control over Thames Water’s operating company. This has been the case since 2017.
Macquarie held equity in Thames Water from 2006 to 2017 and, at its height, had a 48 percent stake.
The infrastructure investor is now the face of the utility’s problems and debt. Macquarie, however, insists that £11bn was invested in upgrading the network while it owned the utility and that the group debt increased over time from £6bn to £11bn, as a result of the investment program.