London, 14 March 2017
Macquarie today announced that Macquarie European Infrastructure Fund 2 (MEIF2), together with two other Macquarie-managed funds, have agreed to sell a combined 26.3 per cent interest (the Sale Interest) in Kemble Water Holdings Limited (Kemble), the ultimate holding company of Thames Water Utilities Limited (Thames Water). MEIF2 is managed by the Macquarie Infrastructure and Real Assets (MIRA) division of Macquarie.
The Sale Interest is being acquired by Borealis Infrastructure, the infrastructure investment manager of OMERS, and Wren House Infrastructure Management Limited, the infrastructure investing arm of the Kuwait Investment Authority. MEIF2, which holds the majority of the Sale Interest, is divesting its stake as the fund is approaching maturity. The Sale Interest is the final divestment by Macquarie of its stakes in the business.
Over the 11 year period in which Macquarie-managed funds have held interests in Thames Water, the business has successfully delivered an ambitious capital investment programme of over £11 billion to maintain, update and expand its network, equivalent to £1.0 billion per annum on average. This average investment is over 200% higher than the five year period before privatisation in 1989 and 72% more than the period after privatisation until MIRA first invested in Thames Water in 2006.
Despite this very significant investment in the network, Thames Water customers still pay the third lowest charges for water and sewerage services in England and Wales.
Through investment and a refocusing of the Thames Water business on its core London and Thames Valley water and waste management operations, significant operational improvements have been made, including:
Martin Stanley, Global Head of MIRA said "We feel privileged to have been associated with Thames Water for such a long period of time and are pleased to have significantly increased investment levels and improved operational performance. Today, Thames Water is undoubtedly a better, stronger and more customer focused business than that which we invested in back in 2006. We wish the new shareholders well in continuing on this journey to improve the business, delivering a strong and improving network to keep pace with the demands of serving a dynamic and growing region."
Nomura and Macquarie Capital advised the sellers.