Think about it though, why would anyone invest here without demanding a significant return?
The bidders are just private equity outfits, they dont do things for free. In the long run this will end up costing customers a lot.
plan for collapse of Thames Water
- Thread starter Mrwong
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The bidders are just private equity outfits, they dont do things for free. In the long run this will end up costing customers a lot.
Soldato
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I had a dream last night where every person in the UK had a personal allowance of essential utilities; water, gas, electricity, internet, minutes/texts.
And those who could afford it could buy more?
Soldato
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Utilities like this became investable not because they were high profit, but because they were long-term stable, hence many pension funds investing.
They only became high-profit when the asset-stripping and revenue-skimming began. Without that profit and without any more strippable assets, endurance is the only attractive element.
Depends.
I believe the American investor may just be trying to outbit the Chinese investor that made a similar offer.
It was specifically the bondholders they wanted, which I don't think will happen and I'm not entirely sure it should, either - They invested for a secure, fixed return. The problem was caused by shareholders (or rather their investment managers) nicking all the profit, so I'd be happy if they lost their investment.
Do the bond holders not have the recourse to hold the company / shareholders to account? What happens when the bonds mature and principal is not returned?
I quite agree, those responsible for the mess should be on the hook to fix it but we all know the main culprits have moved on. Someone or thing needs to take a haircut.
Soldato
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They have some, and in this case the bonds are likely secured by company assets, which is easier to enforce.
However, if there's nothing left to repay them, or if shareholders have restructured things, then the bondholders can lose their principal and any remaining interest.
I think in this case, the bondholders are a parent/holding company of Thames itself anyway (Kemble?), so if they end up owning the assets in lieu of principal repayment they basically stay in the same place in the same corporate stucture.
I don't know that much about this side of it, to be honest. I mostly just work to fix their breaking/broken assets.
I don't think the current shareholders are particularly to blame, but since their profit-based investments are supposed to be high(er) risk, it makes sense to me that they're the ones to take the hit.
Of course it also depends which option will wipe out more of this multi-billion debt. If most of that sits with the internal corporate-shell fiddling aspect of it, then it's kinda just made-up... which then only leaves Thames itself in the position of having had its revenue nicked and merely needing a replacement in order to get back to being the most mediocrity-leading company in the industry.
Soldato
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If anyone would enjoy a quite comprehensive and technical read about the history of, and current challenges in the water sector, the new consultation on the water sector is a really good document.
Its well over 200 pages. But well written.
I would say try and read it objectively. There's a lot of history in the water sector, much of it influenced by government and regulator decisions. Cant be fixed overnight.
Its well over 200 pages. But well written.
I would say try and read it objectively. There's a lot of history in the water sector, much of it influenced by government and regulator decisions. Cant be fixed overnight.
Soldato
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Anyone watched the BBC documentary on Thames Water yet? I watched episode 2 last night.
Found it pretty cringe worthy tbh. Typical format of these type of shows, trying to make the participants look like one of us by showing them drinking cups of tea and wandering around sites in hi-vis (which of course is all staged). Then they show the token site operatives who are supposed to be salt of the earth types stuck with broken kit. Completely cliche stuff.
And the CEO appears on the show to supposedly show he is trying to do his best blah blah.
Pretty embarrassing stuff imo.
Found it pretty cringe worthy tbh. Typical format of these type of shows, trying to make the participants look like one of us by showing them drinking cups of tea and wandering around sites in hi-vis (which of course is all staged). Then they show the token site operatives who are supposed to be salt of the earth types stuck with broken kit. Completely cliche stuff.
And the CEO appears on the show to supposedly show he is trying to do his best blah blah.
Pretty embarrassing stuff imo.
Soldato
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Water bill has just gone from £57 a month to £68. Bloody criminal...
yes it was junk watched about 3 minutes - employees making click bait responses (I'm only following overflow orders - you get what the victorians installed)
and some head bod on a conference call with journalists making similar comments.
Still thought the main australian investment company who milked thames have been given government money to help in similar improvements on the ev charging network
(liitle chef conversions et al.) so watch that spot.
Soldato
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The shots are staged, because they have to be, but outside of office buildings and car parks you really do have to be kitted in full PPE even just to walk on site.
The programme is very typical of this production style.
TBF, most of their London Operations staff are actually like that... but with a lot more swearing.
They focussed on staff at Mogden, but the Hammersmith Ops lot sound like extras off Eastenders!!
The CEO and senior staff are obviously under instruction to present the politically-correct corporate script.
They know who's to blame, they know what the problems are, they know how TW got this bad, but it's 'not the done thing' for people in their roles to harp on about a past that's nothing to do with them personally.
What isn't really shown very well is how stressful this stuff really is. You see a lot of forced smiles, which is partly them being nervous on camera and partly them having to put on professional conduct when really they'd be screaming, crying or cursing at the situation. I know Tess Fayers, I've had dealings with her and she's a right trooper when stuff goes wrong, but they show her as some cookie-baking fluppett getting a little emotional over a storm... ********, she'd be ****** and blinding at whatever she could to get the situation tackled.
Having just utterly raped Thames, they're now ruining Southern Water...
Saw it last night, couple of things stood out.
1)just about everyone in management that was featured appeared to be ill suited for the job they were doing, totally out of their depth and have no grasp on what they were doing, and no ability to substantially effect outcome, it all fundamentally was just a case of getting thru the day. Many seemed to be so miserable/depressed at the reality of the job.
2) Amazed that the "on the ground guy" going outside to the tanks /churns etc, all the values and overflows etc are all controlled manually with wheel valves. No automation.
I got to thinking that the UK's entire infrastructure is just totally gone, water, rail, road, NHS, absolutely everything is vastly over capacity and chronically failing and underfunded, to the point that they are all just fixing the odd line here, filling in the odd pothole. I wonder is the electricity infrastructure in an equally bad condition.
I'm starting to think the country isn't all that far away from coming to a complete standstill.
1)just about everyone in management that was featured appeared to be ill suited for the job they were doing, totally out of their depth and have no grasp on what they were doing, and no ability to substantially effect outcome, it all fundamentally was just a case of getting thru the day. Many seemed to be so miserable/depressed at the reality of the job.
2) Amazed that the "on the ground guy" going outside to the tanks /churns etc, all the values and overflows etc are all controlled manually with wheel valves. No automation.
I got to thinking that the UK's entire infrastructure is just totally gone, water, rail, road, NHS, absolutely everything is vastly over capacity and chronically failing and underfunded, to the point that they are all just fixing the odd line here, filling in the odd pothole. I wonder is the electricity infrastructure in an equally bad condition.
I'm starting to think the country isn't all that far away from coming to a complete standstill.
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This is no surprise. I've witnessed the absolute incompetence from these companies first hand for as long as I've lived in the UK. If you think it's isolated to Thames Water, you're in for a nasty surprise. The lack of investment I've seen, the dangerous and dodgy kit I've seen, it's now all coming to a head and the driving force behind it all is one word: profit. When I worked at BT some of the things I saw would make you want to rip a CEO to shreds.
Put me on the front line as a regional engineering manager for Thames Water, let's see what happens
Put me on the front line as a regional engineering manager for Thames Water, let's see what happens
Put me on the front line as a regional engineering manager for Thames Water, let's see what happens
You'd get nothing done because you'd have no budget, no authority, no autonomy and after a few months, no motivation
Soldato
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It's funny how you go to a meeting at Clearwater Court (main HQ), Kemble, or any of the other corporate centres and everyone has that chippy, smiley, perky can-do attitude... while everyone out on operational sites or similar places, where 'stuff' has to actually get 'done', tends to fully exemplify what you describe...
Manual operation has one screw-valve, you can usually just look to see exactly whats gone wrong with it, and you can fix it without needing degrees in electronics and programming.
Electronics and automation are expensive and have a hundred possible points of failure, many of which will not flag up on electronic monitoring systems - Plus, imagine the cost of implementing automation for the half-million valves, sluice gates and other ancillaries they have around the network... I'll be happy as we'd likely get the contract, but I doubt the customers would be impressed!
Soldato
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It seems to be working, as there are now six bidders vying for TWUL, including America and China.
Still massively disappointing that foreign investors continue taking on a key infrastructure company, which means preferred logistics and supply chains potentially being chosen along with profits being extracted to foreign coffers. Nothing new there though.
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Soldato
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If it makes you feel better, two are Yank, one is Chinese. The other three are British companies:
- KKR - US private equity.
- CKI - Hong Kong infrastructure investor.
- Stonepeak - US infrastucture investor.
- Castle Water - UK Business water supplier.
- Covalis Capital - UK hedge fund.
- FitzWalter Capital - UK fun focussed on investing in distressed debt.
Preferred supply and logistics are just part of the industry - If you want to do works on the railway, for example, there's only one contractor they'll approve, who the railway know well and have already competency-approved. There's no-one else in the business anywhere near as good anyway.
Most of the (decent) supplies and equipment come from Germany, these days, so we're already sending loadsamoney overseas.