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It is said that the American industrialist J Paul Getty noted that “if you owe the bank $ 100, that is your problem. If you owe $ 100 million to the bank, that is the problem of the bank.” Although Thames Water may soon miss some of its 19 billion pounds, obviously the problem of utility program remains.
Thames Water has a lot. It serves nearly a quarter of the British population and has 32,000 km of networks and 109,000 km of sewage, but in a mess, 36 years after privatization. Sewer leaks, accounts grow, and creditors are trying to arrange amazing expensive restructuring, while the company is fighting its regulator of the OTWAT over investment plans.
As the judge wrote last month in the event that one set of bond holder inserted towards another, the customers of Thames Water -ai Bill (including me) “will be terrified” of £ 800 million of planned rescue expenses. There is no ugly hairstyle to feel better because of the incompetence and exploitation, which led to this passage.
But we are where we are, repulsive, although it is, and it is a small alternative for the company to continue working and the return of financial stability.
One is for the government to intervene and take it over. The second is that the owners of the bonds privately restructure it and agree to new owners. They could even become the owners themselves, through replacement of debt for capital and fresh investment.
The third way is to appoint a special administrator that will lead the theater water and somehow sort it. This is supported by observers, including Charlie Maynard, a liberal Democrat MP for Witney, and has attractions In terms of clarity and independence from creditors. But the administrator could not print the money: the company should still be refinancated.
The question will soon be disputed. While Mr. Justice Lech approved The restructuring plan proposed by the High Company of the utility, his verdict could cancel his appeal court later this month. If this is the case, the company would probably fall into the administration after finally running out of cash. Then he will need an emergency loan from the Government to transfer it.
Government He doesn’t want to Nationalize Thames water and take over the burden of ownership, as some work of work would rather. This could reduce some of the high costs of refinancation driven by private creditors, but would also convey the financial risk to taxpayers. Other pressures on the public budget, including defense, have already taken priority.
Fortunately for the Government, there are still some potential bidders, despite all the financial troubles and public scandal. And CK infrastructure Hong Kong and a group of private capital kkr made preliminary offers download the utility if its debts can be restructured. Hope springs forever in financial markets and there is a price for everyone.
This is a “market solution” that favors the owners of most debt of Thames Water, a colorful crew of infrastructure investors and Hedge funds. If about £ 6 billion may be demolished from net debt, the ship may sail under the new ownership and a flag of investment. The judge agreed that they would let them try, after being sure they would bear the cost of financing.
Justice dictates that creditors should suffer to show that return yields come with risks. The judge noticed the temptation to block the restructuring, in which over half of the £ 1.5 billion in fresh loans “go in a circle and return to the pockets of” creditor. The fact that the management of the company supports it is neither here nor there.
But there is also justice in the fact that the owners of the Thames Water Capital, including Chinese and Abu Dabi, are sovereign wealth funds, and British and Canadian pension funds, probably be deleted. There is also some refund, in the inevitability of the Hairstyle of the creditor, even the one that could leave them in control. The administrator would have to make some kind of job with them.
Getty’s Dictum fails for Thames Water, because in order to become a problem with lenders, the debtor must be able to leave. I just have to turn on taps or rinse the toilet to show why it doesn’t work for a public service. Not only should you work without interruption, but and in the future to increase the fresh debt: the UK water sector plans to invest £ 108 billion In the next five years.
Margaret Thatcher was supposed to think about when the sector was privatized in 1989, but it took decades to fill the implications clear. No, from taking over to public ownership, there is no choice for the Temza water, but to continue to borrow and continue.
