Thames Water set to appoint Adrian Montague as chair

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Thames Water is poised to appoint Sir Adrian Montague, an experienced City troubleshooter, to step in as the new chair of Britain’s largest water company as it struggles to raise crucial funding. 

The group, which will publish its annual financial report next week, is expected to confirm within hours the appointment of Montague, who has previously chaired British Energy and Anglian Water and was deputy chair of Network Rail. 

Montague is also chair of Cadent Gas, the UK’s largest gas distribution network and of Manchester Airports Group.

Two people with knowledge of the matter confirmed the appointment, which was earlier reported in The Times.

Thames Water declined to immediately comment.

The British government is on standby for a potential taxpayer rescue of the company, which was recently identified by the water regulator Ofwat as the most leveraged group in a debt-laden sector. 

Rising interest rates are putting pressure on many water companies, with Ofwat having in December expressed concerns about Thames Water, Yorkshire Water, SES Water and Portsmouth Water.

Thames announced a year ago that it wanted to raise £1.5bn from its existing shareholders — large institutional investors such as the Universities Superannuation Scheme and the China Investment Corporation — but it has so far raised only £500mn of this, leaving a £1bn gap.

The previous chief executive, Sarah Bentley, suddenly stepped down this week and one of her co-successors recently admitted the company may need to raise more than £1bn given the pressures on the business. 

Montague, 75, who started his career as a Linklaters lawyer and Dresdner Kleinwort Benson banker, has taken on senior roles in the past involving complex financial troubleshooting in major companies. 

He was appointed as deputy chair of Network Rail when it was set up to replace Railtrack two decades ago.

Montague was also appointed as chair of British Energy when the then-operator of Britain’s nuclear power stations fell into difficulties in 2002. He steered the group back to profitability before selling it to France’s EDF for £12.5bn in 2009.

More recently Montague was chair of Aviva, the insurer, from 2015 until 2020, where he presided in a relaunch of the company’s strategy with a cost-cutting exercise involving mass job cuts. 

His long career in the City of London has included spells as chair of private equity group 3i, insurer Friends Provident, recruitment group Michael Page and Swedish paper producer Cellmark. 

He was chair of Cross London Rail Links, the precursor to the east-west Crossrail line, and also played a pivotal role setting up the Green Investment Bank under the Tory-Lib Dem coalition, acting as deputy chair until 2013.