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https://www.bbc.co.uk/news/business-67696645

How does a company that sells an essential resource in a comparatively resource restricted area go tits up?

Who's been skimminn' then?

Joeboy wrote: ↑Tue Dec 12, 2023 10:19 pm https://www.bbc.co.uk/news/business-67696645

How does a company that sells an essential resource in a comparatively resource restricted area go tits up?

Who's been skimminn' then?

https://en.wikipedia.org/wiki/Thames_Water

Current shareholders include four major pension funds and four overseas investment funds which between them hold over 90% of the company's shares. The company has been criticised for paying substantial dividends to shareholders while simultaneously taking out loans, accumulating £14 billion in debts. In June 2023, Thames Water was reported to be close to financial collapse; while it secured £750m from shareholders in July 2023, the company warned it would need a further £2.5bn from investors by 2030.

nowty wrote: ↑Tue Dec 12, 2023 10:27 pm

Joeboy wrote: ↑Tue Dec 12, 2023 10:19 pm https://www.bbc.co.uk/news/business-67696645

How does a company that sells an essential resource in a comparatively resource restricted area go tits up?

Who's been skimminn' then?

https://en.wikipedia.org/wiki/Thames_Water

Current shareholders include four major pension funds and four overseas investment funds which between them hold over 90% of the company's shares. The company has been criticised for paying substantial dividends to shareholders while simultaneously taking out loans, accumulating £14 billion in debts. In June 2023, Thames Water was reported to be close to financial collapse; while it secured £750m from shareholders in July 2023, the company warned it would need a further £2.5bn from investors by 2030.

Aye, that plus leaks. Holy jamoley...ponzi scheme. DONT BUY IN. ta Nowty.

One of those things where if debt stays cheap forever, great, but it never does and when the music stops, ..........

What happens when MBAs turn up…

Don't forget that Thames is merely the poster boy for the rest of the industry, where one falls the rest will quickly follow. You cannot expect private investment to work in a system where you artificially constrain the ability to return the investment plus the investors profit, the only way this works for the short term is to sweat the assets, they're all gone now and the industry is on its chin straps.

You really have to question the competence of successive governments allowing this "sharp" practise to continue for so long.

Moxi

The entire privatised water industry was kicked off with out any debt whatsoever. The whole thing has been a total disgrace.

Not quite Dan, the industry was privatised because the bill to replace and update everything that was worn out was deemed to be unacceptable to the consumer so they contrived to sell it off on the basis that the private sector would invest and take a profit from the returns from the customer.

Now in my simple mind if the cost was going to be uncomfortable for the customer as a nationalised industry how could politicians think that a private investor wanting a return on investment could deliver lower bills ?

Not long after privatisation the investment companies tried raising bills to the levels required to do the job and make their profits. The government reacted with OFWAT to regulate the industry, not because they thought we were being ripped off ( they knew the costs involved) but because they wanted to be re-elected. They have benefited from low interest costs which has put the crash off for a few decades but it’s inevitable that the system will need to be rescued and the investment made.

Moxi

Well the irony, a company dealing with the universal solvent is.............insolvent ha ha ha.

As Moxi says, it was all so predictable and straight out of the Neo-lib play book.

Govt first under invests in a public utility, then spreads BS that public ownership is rubbish, citing underperforming cash strapped utility.
Then they nick if from us and get Sid to blather on how share ownership is great, knowing full well that most small investors will sell up in a few years.
Private companies and big shareholders coin it in for a while during which time all sellable assets are stripped.
Company starts to run up massive debts and fails in providing good service.
Govt stepsin with big bail out of public money leaving shareholders to laugh all the way to the bank .

Rinse and repeat with all the utilities and services that we used to own.