Thames hit with dividend and wastewater fines totalling £123m

Ofwat has confirmed its draft decisions on fines for Thames Water. There are two elements: a £104.5m penalty for breaches of rules relating to wastewater operations (part of its sector-wide investigation — and accompanied by an enforcement order which will require the company to agree a remediation plan with Ofwat within six months); and an additional penalty of £18.2m for breaches of new rules relating to dividend payments. The regulator described this as “the largest penalty Ofwat has ever issued”.

Thames is seeking new shareholders to fund its turnaround — but implicitly it will be the new owners that have to fund these legacy fines. The company said it is considering its next steps.