News on the domestic front

I don't like the current system where water companies are given targets and then fined if they don't achieve them. The government should take over and spend as much as needed to improve the infrastructure.

Cut out the middle man and take responsibility themselves.

Yes too right.

Customers of Thames water need to get organised and fight it all the way.

Whitewavemark2

I think that from what I understand the creditors are fighting sp. ad. tooth and nail and putting in rescue packages, because they know that if it does go into sp. administration they may loose everything.

But if a package is agreed it must imo come with huge caveats that the environment will be immediately cleaned up and the infrastructure will be sorted etc.

I think we would be completely bonkers to allow yet another ‘debt restructuring’ for Thames Water. Especially if OFWAT allows it to include the cost of infrastructure investment in its customers’ bills.

Going back to Thames water - the lawyers are saying that the government does not have to wait for the company to declare itself insolvent - because it has failed to meet its principle obligation of the way it treats sewage and to keep the water flowing.

Under those principles it seems to me that all the water companies have failed.

When talking about stocking up, I would recommend a reasonable store cupboard for anyone, no only when we face more extremes of weather, particularly as you get older.

And on another front - looking forward, the headlines this morning of the biggest El Niño for 1000 years - blimey. It is, climate scientists say- “supersizing before our eyes”

For the U.K. it apparently means a very raised risk of extreme storms this winter.

Time to think about preparedness.

Our roof😡😡

I think that from what I understand the creditors are fighting sp. ad. tooth and nail and putting in rescue packages, because they know that if it does go into sp. administration they may loose everything.

But if a package is agreed it must imo come with huge caveats that the environment will be immediately cleaned up and the infrastructure will be sorted etc.

Whitewavemark2

Well, creditors must include the supply of goods and services, so it isn’t all loans.

Re HMRC always gets its due before everyone else.

There are any sub contractors that work for TW as suppliers of goods, it's not like the usual failed company it cant just be wound up, it has to be taken over as a going concern, with the existing fiancé in place

The other issue is going to be how much the assets are really worth, the government really need to regain control of the assets, then they can maintain or improve them as the want.
Nobody else to blame if it goes wrong .

Well, creditors must include the supply of goods and services, so it isn’t all loans.

Re HMRC always gets its due before everyone else.

Where is the money going to come from to pay the creditors off.

Where indeed.

I really don't quite understand why the creditors were so keen to lend the money to Thames.

Thames posted a loss of nearly £1bn so it's likely nothing owed to HMRC.

Where is the money going to come from to pay the creditors off. Thames share price is steady they don't believe it's going to happen.

Chatgtp gave me a hierarchy of payment to debtors after special Administration

Start

Think of the debt hierarchy roughly like this:

Thames Water's assets/cash flow

Super-senior creditors
first claim

Senior secured creditors
very strong claim

Other creditors

Shareholders
last in line
End

I must ask it why HMRC wasn't mentioned.

It also said that the secured creditors weren't necessarily likely to get full repayment

the secured creditors don't necessarily get the full £20bn.

Their entitlement is constrained by the value of their security.

And

The creditors retain their claims, but their recovery is governed by insolvency law and the priority of the various creditors.

The government told the Lords in June that it is "very unlikely that all creditors' debt would be repaid" after a SAR because of the priority structure.

That's a pretty significant statement.

I’m not sure about cost.

If the company goes into administration. Normally the first to be paid is HMRC, the other creditors, which presumably will be pretty hefty, but if there is no money in the pot, then they don’t get paid.

The company is worthless, so the shareholders get zilch.

Special administration is different, as the company must continue to run in the national interest, but I would have thought everything else applies?

MaizieD

Whitewavemark2

There is no suggestion yet though of re-nationalisation, however much I’d like that to happen.

Burnham is talking about “greater public control” that is not re-nationalisation.

Special Administration is not renationalisation as popularly understood, it is a different mechanism for taking this public control that Burnham constantly talks of. It is up to the Administrator to decide where the company ends up it seems. Either back in the private sector or in the public sector.

Yes much greater control and responsibility from government, however the "company" has got to be allowed to make a profit AND lenders have to get competitive interest on loans

So don't expect much change without a lot more cost

No water company is under sp. Administration yet, and I think that the government will try initially at least to go down the road of giving much greater powers to OFWAT who will be charged to use them, with guidance from government.

Whitewavemark2

There is no suggestion yet though of re-nationalisation, however much I’d like that to happen.

Burnham is talking about “greater public control” that is not re-nationalisation.

Special Administration is not renationalisation as popularly understood, it is a different mechanism for taking this public control that Burnham constantly talks of. It is up to the Administrator to decide where the company ends up it seems. Either back in the private sector or in the public sector.

On the survivalist front we have no worries at all, OH is a committed squirrel our cupboards are crammed, the freezer is full we could survive for 6 months. We have enough solar to run essentials and a log burner with a flat top we can use for cooking

AuntieE

Whitewavemark2

We are also going to be told to stock up on food and be prepared for emergencies. The government is issuing advice apparently.

Just hope this doesn’t lead to panic buying. I think the best way is to just add a couple of items to your weekly shop.

Also get a grab bag ready - not sure what to put in it. Passports I guess.

In Denmark we have been advised to have enough tinned or dried food and drinking water for our families for three days at least, torch batteries, and a radio that can be operated using batteries if power fails. Also candles or oil lamps and oil for them.

I personally have made sure that my smoke alarms are working and that I have fire extinguishers to hand.

Cash in order to be able actually to buy food or other necessities if banking systems are hacked, or it is not possible to pay using paypal or the like.

If you decide to pack a grab bag, include not only your passport but other important documents, such as the deeds to your house. your will, vaccination certificates and any papers relating to your dog or cat, if you have pets. A warm jumper, rainwear, a first aid kit, and again if you have pets have a cat carrier where you can grab it and a dog lead handy if appropriate. Medicine, if you use any that must be taken daily, and remember your wallet, cash, driving licence, reading glasses or hearing aid if appropriate, warm socks and a change of shoes won't come amiss either, nor will a warm blanket.

That is a really handy list.

Thank you

OFWAT definitely needs sorting out. It has been too soft on water monopolies and under the thumb of industry, that it is meant to police, for far too long.

Following the landmark Independent Water Commission report it needs systematic overhaul and a new single regulator - with teeth and effective- for the country. The sooner the better.

Whitewavemark2

There is no suggestion yet though of re-nationalisation, however much I’d like that to happen.

Burnham is talking about “greater public control” that is not re-nationalisation.

You don't mean OFWAT are actually going to do their job and regulate the industry properly, assuming the government allows money to be spent.

Whitewavemark2

We are also going to be told to stock up on food and be prepared for emergencies. The government is issuing advice apparently.

Just hope this doesn’t lead to panic buying. I think the best way is to just add a couple of items to your weekly shop.

Also get a grab bag ready - not sure what to put in it. Passports I guess.

In Denmark we have been advised to have enough tinned or dried food and drinking water for our families for three days at least, torch batteries, and a radio that can be operated using batteries if power fails. Also candles or oil lamps and oil for them.

I personally have made sure that my smoke alarms are working and that I have fire extinguishers to hand.

Cash in order to be able actually to buy food or other necessities if banking systems are hacked, or it is not possible to pay using paypal or the like.

If you decide to pack a grab bag, include not only your passport but other important documents, such as the deeds to your house. your will, vaccination certificates and any papers relating to your dog or cat, if you have pets. A warm jumper, rainwear, a first aid kit, and again if you have pets have a cat carrier where you can grab it and a dog lead handy if appropriate. Medicine, if you use any that must be taken daily, and remember your wallet, cash, driving licence, reading glasses or hearing aid if appropriate, warm socks and a change of shoes won't come amiss either, nor will a warm blanket.

I dread to think what will be in the Budget when people in Manchester were let down when Burnham was Mayor.
.What annoys me is the way the Labour Party continue to blame the Conservatives even after throwing away our money on items that could have been sorted out through continual talks, as with the GPs who only work 3 days a week.
Do you remember when there was always one GP working on Sundays ?

There is no suggestion yet though of re-nationalisation, however much I’d like that to happen.

Burnham is talking about “greater public control” that is not re-nationalisation.

David49

It is effectively bust shareholders will loose out that is separate from the loans, they are backed with real assets and will have to be repaid, defaulting on secured loans will bring the whole economy down, only Banana Republics do that

TW actually own all the reservoirs, pipework and treatment works loans were secured against them the government will have to buy them back. That was the downside of the privatization rush, a short term gain that has come back to bite us.

Value on the balance sheet is over £20bn if the economy had spare cash it would just buy it all back, Its not just £20bn it's the extra investment needed to improve the infrastructure maybe £1 or 2bn per year, that would have to paid by consumers.

Well, a long session with Chatgtp tells me that if Thames Water were to be put into Special Administration the owners of the secured loan would not be guaranteed to get back the full value of what they invested .

It's conclusion is this:

The £20bn debt is a claim against Thames Water, not a £20bn nationalisation price. Under SAR, the amount ultimately recovered by creditors would depend on the value of the business and the statutory priority of their claims. The immediate public-finance requirement could be around £2bn to keep the company functioning, while the much larger cost is the continuing investment needed to repair and upgrade the infrastructure.

And there's an intriguing economic possibility here. If the government can take the company through SAR, impose appropriate losses on creditors, and then operate it as a publicly owned utility financed at government borrowing rates, the long-term public cost could be considerably lower than rescuing the existing private capital structure.

In a national emergency I doubt you would be able to travel anyway, unless of course you were a member of the cabinet or Royalty. I’m sure they all would have a bunker or two, although having visited an old cold war bunker a few years back I doubt I’d care to go into one