Abu Dhabi Investment Authority (ADIA, Financial), a major stakeholder in the British utility company Thames Water, has significantly devalued its nearly 9.9% holding in the struggling entity. Thames Water is burdened with debt and provides services to around 16 million people in and around London. The company is facing a crisis involving sewage overflows, a deteriorating pipeline network, and significant debt.
According to financial records from an ADIA subsidiary registered in Luxembourg, the devaluation was attributed to challenging regulatory conditions and poor operational performance. ADIA reduced the value of its stake from £263 million ($344.21 million) to £1 by the end of last year. Additionally, a £31 million loan to a Thames Water affiliate was fully written off.
The move comes as UK Chancellor Rachel Reeves prepares to announce the budget at the end of the month, amid calls from business groups for measures that bolster investment confidence in the UK. Last month, credit rating agencies S&P and Moody's downgraded Thames Water, cautioning that the company is close to exhausting its funds and nearing default.
Without a rescue plan, the UK government and water regulator Ofwat may need to place Thames Water under a Special Administration Regime (SAR).
