Nope. They wouldn't sell assets undervalued like that without reason and in most cases its the cheap pricing means also taking on debt.
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plan for collapse of Thames Water
- Thread starter Mrwong
- Start date
Shareholders have no say here, shareholders are not bondholders. Shareholders will be wiped out. They are not the same peoples.
I don't think you understand how much a trillion in debt is
It's exactly how a bankrupt company would be treated, I don't know if I don't understand your larger point or if you don't
If you're bankrupt you get no say in how much or to whom your former assets are sold to, that would be the job of the receiver
'They' being the insolvency practitioner, sorry I had to spell that out for you.
You don't seem to understand people don't sell £1 of assets for 1p without reason.
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OK, 'they' would sell for as much as they could achieve, that might be a penny on the dollar or 10.20.50, It's a buyer's market to low ball as much as possible. the receiver can't refuse to sell.
who decides it's worth a £1 or a penny ? 101 economics is it's not the book value, it's the buyer.
Bringing it back around, the water company can claim they have X million of on book assets, the creditors can claim they have X million in debt secured on those x million of assets. none of it matters unless someone is willing to pay that amount for them.
You'll find most of the debt is ring fenced and secured against the assets. Very complex legal structure.
It's not really that complex, if you have 50 million secured on a pumping station, and they only offer for it is 1 million that's all you're getting (unless it's the government and taxpayer money in which case obviously they should just pay the full price)
What sticks out from the Guardian Graphs is.
The water companies were privatised in 1989
Thames water paid out 400mil in dividends during 1990....
It was then sold again in 2001 but during 96-99 it paid out well over 2 billion in dividends?
I wonder what happened in 2006/7
another massive dividend of over 600mil
It literally looks like it was undervalued and sold in 1989, asset stripped and the proceeds given as dividends.
Then a few years before they sell on the company they asset strip another 2 billion....
Capitalism just works
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keep -up ;
if the government, as suggested, leaves (thames) investors with 40% of their investment , what do you think happens for other marginal water companies tomorrow
The entire Thames water is a great example of how useless our country is at managing core infrastructure.
I saw calls for 56pc bill increases. It's absolutely vile. Over here dwr cymru has its issues. But at least it's not for profit.
I saw calls for 56pc bill increases. It's absolutely vile. Over here dwr cymru has its issues. But at least it's not for profit.
Soldato
What have they actually done wrong? The unsustainable dividends seem to have ended 7 years ago, and since then it's only been a matter of time before either the level of debt begins to spiral ending in bankruptcy or the regulator gives them permission to either reduce investment or increase prices significantly.
Basically all of the current board have been appointed much more recently than that.
yea after the company was milked dry...
as you say unsustainable..... should never have been allowed to happen.
profits should have been capped at like 5%... supermarkets were doing 2-4% profits for decades fine.
They clearly won't invest in infrastructure and then we end up with sewage everywhere
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That they're merely holding the bag of prior malfeasance is irrelevant to me, the country's establishment is in desperate need of some forceful reminders that they're allegiance is to this country and not merely their pockets. Some public flogging may go a long way in reorganising their priorities.
Soldato
- Joined
- 11 Sep 2013
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- 12,411
You really think punishing someone for the 'sins of their fathers' will motivate them to improve things.. or just dissuade anyone else from trying to fix them, while teaching others that you can get away with profiting from breaking stuff so long as you do a runner afterward?