By Harry Mottram: Thames Water has just a few days to repay £190 million pounds to its banking lenders or face going bust – or the first stage of insolvency of entering administration. It has until the end of April to come up with the cash or it may default on the loans and propel the utility towards administration since it can no longer pay its debts.
Ian Carrotte of ICSM Business Group said it was a scandal that a utility that receives its product free from the sky in the shape of rainwater could have got itself into such a mess. He said: “The biggest losers are their customers who have been take for fools for years and are now threatened with a 40% increase in their bills. While contractors and suppliers must be wondering it they will ever get paid – as administration could see invoices literally thrown in the bin with no chance of accounts being settled.”
The banking lenders include the state-owned Bank of China, the Industrial and Commercial Bank of China and Allied Irish Banks who have refused to extend credit unless the Parent Company of Thames Water Kemble Water Finance cough up some more money. That seems unlikely as Kemble Water Finance ae themselves in dire financial trouble with £18 billion worth of debt. If the utility does go ‘tits up’ as some would call it, then the lenders would be likely to get some of their money back but the likes of the average contractor from pipe suppliers to the printers who produce their glossy brochures are likely to be left high and dry.
Thames Water was privatised in 1989 by the Conservative Government of Margaret Thatcher. It employs more than 7,000 staff plus has hundreds of contractors on a job-by-job basis. It is owned by a number of stake holders including a Canadian pension fund called Ontario Municipal Employees Retirement System, the UK University pension fund called The Universities Superannuation Scheme along with several investment funds with smaller stakes.
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ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com
