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It was another bumpy week for Thames Water. Thousands of customers from South London were left without water after a pipe eruption. The financial times reported In this half of the sewage systems of the utility company, the pipes and tanks are missing to process enough waste water, which flows in untreated waste water in rivers and waterways. The debt loaded supply company vocation To increase customer invoices by more than 35 percent by 2030 by more than 35 percent that the WAT supervisory authority approved and was deleted in court through a proposed court £ 3 billion creditor rescue package. It is time that the company has been released from its misery through a special administrative regime (SAR) – a form of temporary renationalization – which enables the non -sustainable finances in the public interest.
Thames waterThe one quarter of the British population is the figurehead for the failure of England’s experiment with the privatization of former public region even more than in many colleagues, used his balance sheet to maximize the return.
A regulatory focus on consumer prices and the operational unit and not on the arcane company structures above proved inadequate. Since the increase in interest rates to the 16 billion GBP from Thames Water caused the financing problems in 2023, the debt has increased to almost 19 billion GBP.
A judge at the High Court was this month Vertical Via an proposed restructuring plan with a loan of 3 billion GBP of the best bonds of the pension company, which includes the US hedge fund like Elliott Management. Funding with a steep annual interest rate of 9.75 percent is intended to provide a “bridge” for a broader restructuring, the time enables time to increase new equity and negotiate debts. The judge is expected to publish his decision this week as to whether the plan meets the legal requirements of the companies. If he rejects it, Thames Water said privatization.
Even if the rescue package of 3 billion GBP is granted, no guarantee for new stock investments is secured. The Chief Financial Officer informed the court to expect the total interest rate of the pension company to reach 800 million GBP up to 900 million GBP in the amount of the new loan costs, and its invoice for the restructuring of lawyers and advisors might Top £ 200 million. A liberal democratic MP that represents the environmental fighter Thames Water ‘S customer accounts already went into the maintenance of his debts.
So there is a strong argument that the administration is in the broader public interest and in the best interest of the 16 -meter customer of the company -and can in any case be the ultimate goal. The SAR procedure should enable administrators to impose a haircut on the creditors in order to reduce the balance sheet and restructure the company in order to make it profitable for the future. Thames Manager would deal with focusing on turning operations over. The aim should be to return the Thames as a stable private company privately owned.
Critics have proposed to be a temporary renationalization themselves expensive For the government. However, debt interest would be frozen and free cash to invest in the infrastructure. Conservative and Labor governments have feared that the imposition of losses for investors, some from overseas, would deter important investments in other infrastructure projects. However, an insolvency process is a normal part of capitalism to ensure that productive assets can be preserved and restarted. In this case, it would be the best way to end a saga of mismanagement, financial technology and ineffective regulation – and to maximize the opportunities of a sound business.
