Indeed, as a shareholder you cannot simply say you will only accept profit on your shares...if the 'company' neglects it's duty to run the company correctly for the sole purpose of inflating share prices for shareholder profit....it's not a viable business.
plan for collapse of Thames Water
- Thread starter Mrwong
- Start date
Shareholders usually get wiped out in these scenarios anyway, the debt belongs to the bondholders.
Looks like we have a plan anyway.
Thames Water nationalisation plan could move bulk of £15bn debt to state
Exclusive: Under Whitehall blueprint for water company some lenders could lose up to 40% of their money
www.theguardian.com
They also get the alleged £19bn worth of assets, you cant have your cake and eat it.
If you let the company go bust, its assets will be broken up and sold to the highest bidder, that money goes to pay back creditors and if there is anything left, investors.
Given what Themes Water actually is, that can't really happen and needs to be 'sold' as a whole unit and that normally entails the assets and most of the debt being picked up for a nominal fee, say £1. It's essentially a pre-pack insolvency arrangement and in this case its being 'sold' to the government.
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Soldato
One thing that concerns me, is that if they are forced back to government control by what-ever **** government is around at that time, then you can almost guarantee they will screw it up and get hit by legit claims from the ex-investors and loose billions.
Caporegime
Or they can do a good job and it would spur on future governments to reinstate other utilities back into state ownership.
Doing the right thing by Thames Water is surely a big plus for any future government to get voters on side.
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In theory, them selling it will net more than the debt but yes I get the sentiment.
Caporegime
I think that train has bolted now. The government are under such a massive spotlight unlike the old days.
Especially now councils etc are all going bankrupt etc that the government really needs to start increasing its revenue streams.
You are most likely correct however but I do like to be a little optimistic in life for my own detriment it seems!
Soldato
Doing a good job is something I'm sure plenty never associate with government or councils tbh.
Soldato
I still see no justification for the Government to step in.
It has nothing to do with credit rating because the business had a monopoly and was badly run by its investors and large dividends were taken from the company (those we know about and other “management fees”) so it’s not about UK PLC stepping in to save struggling genuine businesses as a matter of good Government. This would be bailing out bad corporate behaviour and billionaire greed and that’s unjustifiable.
It has nothing to do with credit rating because the business had a monopoly and was badly run by its investors and large dividends were taken from the company (those we know about and other “management fees”) so it’s not about UK PLC stepping in to save struggling genuine businesses as a matter of good Government. This would be bailing out bad corporate behaviour and billionaire greed and that’s unjustifiable.
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Awful that you can fail, fail badly, but someone (me and you) will pay your debt
The business has £billions of assets, when a business fails, the assets get sold. Who do you think gets paid from the sale of those assets?
The answer is the creditors, first it will be preferred creditors and those who have their loans secured on certain assets, then it’s the other creditors and if there is anything left, the shareholders.
This is not the government paying off the debt, it’s the government buying the business and they don’t get to take over £billions of assets for nothing.
The creditors will be taking a hit and the shareholders will get nothing.
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They absolutely can take it over for nothing since it's a piece of critical infrastructure.
Whats the worst that could happen? All the other public service companies become anathema to vultures? That'd be a shame.
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Many of these assets can't be sold, or more importantly there won't be a buyer for it. It's like trying to sell a dam, what's the buyer gonna do, pull up with a truck and take the dam out the ground with him?
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No they can’t, we don’t live in Corbyn’s dreamworld, and even he was going to pay to nationalise it.
A) it would utterly destroy the reputation of the government and the confidence of any private investor who may be or considering investing in U.K. infrastructure. Do bear in mind that almost all U.K. utility infrastructure is privatised at this point.
B) it would probably be illegal and the creditors would certainly challenge it in the courts.
The government sold them in the first place so that can’t be true…
Edit: I’m not defending the government here or the potential price. I just live in the real world where you can’t just take other people’s assets because you don’t like who owns them.
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The government should be investing in this not a bunch of faceless suits with no accountability to the citizens that actually use the infrastructure. As for it being illegal... make it legal.
They are, at a cost of £16b if said rumours are true…
See point A. It would literally cripple the U.K. as investors would pull their money quicker than you can say ‘send the sewage into the sea’ and those companies would collapse and probably tank the economy with it.