Switch off the editor’s digest free of charge
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
The Thames Water managing director of the GBP was expected to receive 18.5 million GBP, which were agreed as part of an emergency loan of 3 billion GBP, even as the largest water supply company in Great Britain shortly before the bankruptcy edge.
The payments that were carried out after an outcry by the MPs in the Commons Environment, Commons Environment, Food and Rural Affairs Committee in the maintenance of the MPs, should be shared between 21 leading employees, but Chief Executive Chris Weston and other top directors are excluded.
Overall, the executives from Thames until June next year would have received three times the basic salary with a first payment of 50 percent of the salary already raised in April. According to documents published by the committee on Monday. The Thames Board does not intend to win back this money, Thames chairwoman Sir Adrian Montague wrote in a letter dated May 30.
The future of the Thames -which is fighting under a debt mountain in the amount of 20 billion GBP -depends on the US -Private -Equity company in the balance KKR last week went away From a rescue agreement of £ 4 billion for the supply company. The company offers water and sewage services for around a quarter of the British population.
Feargal Sharkkey, the former rock singer, who became Water activist, said that payments to Thames executives were an “obscene who escaped all appropriate decency” and demanded that the company were renationalized as part of the government’s special administrative regime.
Thames, which was also the subject of public anger over wastewater overflows and pollution, according to a letter from Weston to the chairman of the environmental committee from the environmental authority of up to 480 million GBP compared to “worst-case analysis”.
The potential fines were in addition to 900 million GBP of possible punishments because they did not provide its customers adequate services that could be handed over in the next five years, the letter added. The company was with a exhibited Record well through the WAT industrial regulator for fourteen days ago.
Thame’s bonds are urged to do without punishments for previous environmental injuries in order to reset the company’s financial performance and escape its “Doom loop”.
Among the creditors – to which the US hedge funds Elliott Management and Silverpoint Capital belong – have proposed to inject 3 billion GBP equity in the Thames and to bring a 20 percent writown to the value of their loans, as they are familiar with with the plans of the group.
This would reduce the debts of Thame from 20 billion GBP to 12.9 billion GBP and pave the way for an investment grade rating, said the people involved in the discussions.
The group of creditors, which include more than 100 financial institutions, which is due to Thames more than 13 billion GBP, hopes to agree a deal next month.
The turnaround plan would include the replacement of the entire board of the supply company, although Weston probably does not stay in the mail.
The creditors would also give the company another 2 billion GBP, in addition to one expensive £ 3 billion loans This was approved by the High Court in London at the beginning of this year. Thames Water has pulled down 750 million GBP, which gives him enough cash to survive until September.
If the creditor contract fails, other investors, including the CK infrastructure and the Castle Water, have stated that they would still be interested in offering Thames, even if it would be temporarily renationalized as part of the government’s special administrative system. The government has declared that it is committed to a solution for private sector.
Thames defended the retention payment plan for managers, but confirmed that the plan held and added that none of the payments had been financed by the customers.
With regard to the proposed creditor contract, Thames said: “In the upcoming weeks, the board will consider the complete recapitalization and turnaround plan, which was submitted by our creditors.”
The creditor group said that the Turnaround plan would: “Fix the basic causes of Thames Water’s problems, restore the balance sheet, rebuild the customer’s trust and fix the basics of the business once and for all”.
Ofwat said it “started a thorough review of the submission of the group of high -ranking creditors”.
