DRIED UP
UK taxpayers could be hit with huge price rises after Thames Water investors refuse to save struggling firm
It is now likely that the Government will have to step in for the water firm via a special administration
TAXPAYERS could be left carrying the can for Thames Water after investors pulled the plug.
The UK’s biggest water firm was plunged into a fresh crisis today after investors refused to stump up a £500million lifeline.
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Shareholders called the business “uninvestable” after the water regulator blocked Thames Water’s plans to hike customer bills and refused to budge on penalties.
Ofwat has to sign off the water company’s five-year plan and is currently investigating a £37.5million dividend paid to parent company, Kemble, to repay debts.
Thames Water wanted to hike bills by 40 per cent — more than £300 a year — to afford a £20billion investment plan.
Thames Water, which serves 15million households, is now locked in a stand-off with Ofwat which has said it needs “to see companies deliver the performance that customers expect”.
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Last year Thames Water was fined £100million for discharging sewage into rivers and for failing performance targets.
Chris Weston, the chief executive, said the company can keep going until next May or June as it has £2.4billion of liquidity and cash.
But Thames Water’s nine shareholders today said that because Ofwat had not provided the necessary regulatory support they were not “in a position to provide further funding”.
It is now likely that the Government will have to step in via a special administration.
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The value of Thames Water’s bonds plunged today to just 16p in the £1.
Its debt has ballooned to £14.7billion, leading to a cash crunch for the business.
Debt-ridden Thames Water hit with multi-million pound fine for polluting rivers as firm ‘pushed to brink of collapse’
Chancellor Jeremy Hunt said the Treasury was monitoring the situation but stressed Thames Water was “still solvent”.
Communities Secretary Michael Gove said consumers should not have to pay for mismanagement.
SUPERDRY TAKEOVER BID BINNED
SUPERDRY boss Julian Dunkerton has dropped a formal takeover attempt for the retailer — but is still planning to push it off the stock market.
Mr Dunkerton, who owns a 20 per cent stake, had been trying to raise funds to finance a takeover.
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Now he has decided an offer would not work with a turnaround plan.
Instead, he plans to underwrite a share sale at a deep discount that would be conditional on Superdry de-listing from the stock market.
It would likely result in him gaining control.
In its heyday Superdry was worth more than £1.8billion but it has crashed to just £28.5million.
Mr Dunkerton has been trying to revive the business since he overthrew Superdry’s board in 2018.
The business also announced an extension to a £10million loan facility with a 16.2 per cent interest rate with HILCO.
ADMIN BID FOR MUJI
THE high street has taken another knock after Muji, the Japanese stationery and clothing retailer, had to appoint administrators.
The business, which has six stores in London and one in Birmingham, said it was part of a “planned strategic restructuring” and online orders would be fulfilled.
Julie Palmer, of Begbies Traynor, said it “is a reminder of the relentless financial strain on retailers”.
UK’S GDP BLUES
THE UK slipped into a mild recession at the end of last year, official figures confirm.
The Office for National Statistics confirmed the economy shrank 0.1 per cent in the three months between June and August, followed by another 0.3 per cent decline in the next three months.
A recession is classed as two negative quarters of growth.
However, there are signs the UK is bouncing back.
However, Bank of England rate setter Jonathan Haskel said he thought interest rate cuts were a “long way off”.
Shares in AO World surged by as much as 12 per cent after the online electrical retailer said profits would hit the top of estimates.
It said its turnaround has momentum and it expects to make £33million of profits on £1.04billion of sales this year.
LODGE’S SWIFT BUCK
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TAYLOR Swift and Bruce Springsteen will deliver a big boost to Travelodge this year as fans flock to book rooms.
The company, which has 600 UK hotels, is cashing in on Swiftie mania and the price of rooms in Liverpool on the nights the pop star is gigging there have soared to £220 compared to a usual price of £45.
The chain toasted record sales of £1.04billion, after a 13.7 per cent rise last year, as companies made cost savings by putting staff in cheaper rooms.
BOOTS’ BIG KICK
BOOTS was boosted by a surge in the sales of skincare in the last quarter.
The retailer, which has around 2,000 shops across the country, said that its own No7 range of anti-ageing products grew 15 per cent while other posh skincare brands also rose sharply.
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Sales at Boots UK rose 3 per cent over the three months to the end of February.
Meanwhile, US parent company Walgreens Boots Alliance is still considering a £7billion London stock market listing for Boots.
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