Thames Water: Inside the Crisis
Discussion
Thames Water communications director decides it is a good idea to let camera's inside the company for 6 months to show it is not their fault.
It is not going well for them, all the new management blaming the old management for under investing, yet they are £15 bn in debt, where did all the money go?
Interesting to note that the corporate head office is lovely clean and shiny, full of branded note books etc, and other unnecessary fluff, but crucially seems devoid of staff, but all the actually facilities that provide the services look abandoned.
The real low point was when the CEO starting watching the cricket on the PC!
The New Statesmen's take on it: https://www.newstatesman.com/culture/tv/2025/03/th...
The Guardian's take on it: https://www.theguardian.com/tv-and-radio/2025/mar/...
It is not going well for them, all the new management blaming the old management for under investing, yet they are £15 bn in debt, where did all the money go?
Interesting to note that the corporate head office is lovely clean and shiny, full of branded note books etc, and other unnecessary fluff, but crucially seems devoid of staff, but all the actually facilities that provide the services look abandoned.
The real low point was when the CEO starting watching the cricket on the PC!
The New Statesmen's take on it: https://www.newstatesman.com/culture/tv/2025/03/th...
The Guardian's take on it: https://www.theguardian.com/tv-and-radio/2025/mar/...
Megaflow said:
Interesting to note that the corporate head office is lovely clean and shiny, full of branded note books etc, and other unnecessary fluff, but crucially seems devoid of staff, but all the actually facilities that provide the services look abandoned.
Usually because that's the bit that the next owners will see...Megaflow said:
Interesting to note that the corporate head office is lovely clean and shiny, full of branded note books etc, and other unnecessary fluff, but crucially seems devoid of staff, but all the actually facilities that provide the services look abandoned.
Have yet to watch it but this comment reminds me of my local council which has been declared bankrupt.When you drive by their offices late at night, you can see all the interior lights are on.
In the meantime council tax is going up by 9%, assets are being sold at well below market value and services cut.
But it's not their fault - apparently!
I thought the private sector was the panacea to all ills.
Probably not when former publicly owned statutory undertakers are laden with debt and raped by successive owners.
Those school fees, wife's horses, houses in OX7 and Tuscany, membership at Oswalds and a garage to make a powerfully built PH director envious don't pay for themselves. .
Trebles all round
Castrol for a knave said:
I thought the private sector was the panacea to all ills.
Probably not when former publicly owned statutory undertakers are laden with debt and raped by successive owners.
Those school fees, wife's horses, houses in OX7 and Tuscany, membership at Oswalds and a garage to make a powerfully built PH director envious don't pay for themselves. .
Trebles all round
Partly true, but they were sold off by governments who couldn't afford to run them themselves. Why spend billions of taxpayers' money bringing the water system (and others) up to date when you can flog it and make billions instead? Public or private sector, the country is running out of money to cater for the burgeoning population, not least because productivity is low and descending.Probably not when former publicly owned statutory undertakers are laden with debt and raped by successive owners.
Those school fees, wife's horses, houses in OX7 and Tuscany, membership at Oswalds and a garage to make a powerfully built PH director envious don't pay for themselves. .
Trebles all round
Megaflow said:
It is not going well for them, all the new management blaming the old management for under investing, yet they are £15 bn in debt, where did all the money go?
They were asset stripped in the period they were owned by Macquarie Group. Much as Man Utd have been by the Glazers.Patio said:
'Liquidity runway' FFS
9.75% interest on the £2 billion they've just slimed
More directors than Hollywood
Complete s
t show
About sums it up. CEO, COO, Director of Waste, Director of Communications, etc9.75% interest on the £2 billion they've just slimed
More directors than Hollywood
Complete s
t show otherman said:
Megaflow said:
It is not going well for them, all the new management blaming the old management for under investing, yet they are £15 bn in debt, where did all the money go?
They were asset stripped in the period they were owned by Macquarie Group. Much as Man Utd have been by the Glazers.Stripping assets can indeed increase indebtedness.
Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
Eric Mc said:
Stripping assets can indeed increase indebtedness.
Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
I also think the 'commitment to low prices for consumers' was a strategic decision, not born of charity, but to hide what they were doing. IF the bills are low, no one is going to complain or look to hard at the inner workings of the business.Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
Dynion Araf Uchaf said:
Eric Mc said:
Stripping assets can indeed increase indebtedness.
Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
I also think the 'commitment to low prices for consumers' was a strategic decision, not born of charity, but to hide what they were doing. IF the bills are low, no one is going to complain or look to hard at the inner workings of the business.Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
Eric Mc said:
Stripping assets can indeed increase indebtedness.
Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
Yes, in that respect you are correct. However, when Thames was privatised it no debt, well, very little, a couple of million. Somehow in 40 years they have sold all the assets, not invested in infrastructure and still ended up £16bn in debt.Say you started off with a balance sheet showing assets of £100 million and debts of £50 million. In theory, the business has a net worth of £50 billion (£100 million less £50 million). If you disposed of the £100 million assets but sold them off at bargain basement prices (say £20 million)., you would end up with debts of £30 million (£20 million proceeds of sale offset against the pre-existing liabilities of £50 million).
That is what "asset stripping" is. You might ask, why on earth would an entity get rid of assets ostensibly worth £100 million for just £20 million. Well, the assets might have been showing in the balance sheet at unrealistic values. Or perhaps the company drastically needed to convert some of its assets into cash.
Strippers have a tendency of selling off assets for low prices to generate cash - and some of that cash generated might be spent out of the company on dividends or bonuses to the directors. I would suggest that is part of what went on at Thames Water.
IMO this is poor management on an Enron scale.
I'm sure they did a whole combination of things that has resulted in them ending up in the state they are in.
The villians of the piece are, in my view, Ofwat. Their job is to oversee what the privatised water companies do and stop them from playing fast and loose. They failed miserably in this.
The villians of the piece are, in my view, Ofwat. Their job is to oversee what the privatised water companies do and stop them from playing fast and loose. They failed miserably in this.
I thought this was a pretty decent watch, I’m not entirely sure it painted the picture that TW were hoping, though. I’ve only seen the first episode thus far, but it appeared to be an openly failing outfit full of people who are staring into an abyss. The degree of shared universal hopelessness was pretty thinly veiled I thought. I’m curious what exactly the Comms Director was hoping the programme would show; perhaps the idea was to make it clear that TW is on its arse to justify the bill increases, whilst attempting to show a deeply committed workforce and a heavy dose of “it’s not our fault, guv”. I have to say it isn’t somewhere I’d want to work after watching this.
Thames Water were a customer of ours until recently. They would spend approx £300-500K with us each year.
They had credit terms but always paid late, so there credit limit was steadily reducing and when the news broke of the debt mountain, our Parent Company made us withdraw credit and put them on pro forma basis where they had to pay up front for goods.
Thames Water just couldn't understand why we had done this, but still kept placing orders expecting credit. When we stated that unless payment was made we wouldn't despatch goods, they told us they couldn't work like this and basically tried to bully us into giving them 60 day credit terms and a large credit limit.
We basically told them to go away in the end and that the only option available to them was pro forma basis. We haven't had an order from them for the past 3 months now, so they must be sourcing from elsewhere. But we have filled that gap with other customers who aren't bullies and pay on time.
Thames Water are an absolute basket case financially.
They had credit terms but always paid late, so there credit limit was steadily reducing and when the news broke of the debt mountain, our Parent Company made us withdraw credit and put them on pro forma basis where they had to pay up front for goods.
Thames Water just couldn't understand why we had done this, but still kept placing orders expecting credit. When we stated that unless payment was made we wouldn't despatch goods, they told us they couldn't work like this and basically tried to bully us into giving them 60 day credit terms and a large credit limit.
We basically told them to go away in the end and that the only option available to them was pro forma basis. We haven't had an order from them for the past 3 months now, so they must be sourcing from elsewhere. But we have filled that gap with other customers who aren't bullies and pay on time.
Thames Water are an absolute basket case financially.
Eric Mc said:
I'm sure they did a whole combination of things that has resulted in them ending up in the state they are in.
The villians of the piece are, in my view, Ofwat. Their job is to oversee what the privatised water companies do and stop them from playing fast and loose. They failed miserably in this.
Very true.The villians of the piece are, in my view, Ofwat. Their job is to oversee what the privatised water companies do and stop them from playing fast and loose. They failed miserably in this.
The programmes were interesting but I would like to know how Thames Water are going to reduce their debt pile, especially given they've just borrowed a load more money at a high interest rate? Also, how are they going to make the necessary infrastructure investments? Then how are Ofwat going to ensure they do both those things given their abject failure in their own role to date? I'd also quite like to know the justification for paying the chief executive of Thames Water a hefty bonus given he's only been there a few months and appear to have achieved nothing.
jtremlett said:
Eric Mc said:
I'm sure they did a whole combination of things that has resulted in them ending up in the state they are in.
The villians of the piece are, in my view, Ofwat. Their job is to oversee what the privatised water companies do and stop them from playing fast and loose. They failed miserably in this.
Very true.The villians of the piece are, in my view, Ofwat. Their job is to oversee what the privatised water companies do and stop them from playing fast and loose. They failed miserably in this.
The programmes were interesting but I would like to know how Thames Water are going to reduce their debt pile, especially given they've just borrowed a load more money at a high interest rate? Also, how are they going to make the necessary infrastructure investments? Then how are Ofwat going to ensure they do both those things given their abject failure in their own role to date? I'd also quite like to know the justification for paying the chief executive of Thames Water a hefty bonus given he's only been there a few months and appear to have achieved nothing.
I’m perplexed at the boss and his Comms chief, they are presumably seasoned professionals brought in to do a difficult job, and yet they seem totally clueless. It’s blindingly obvious that the very first thing the company needs to do is make a frank admission of how catastrophically poorly it was run in the recent past, and accept that they’ve been picked clean and that’s why they are where they are. Everyone knows this anyway, it’s been a national topic of conversation for quite some time. And yet, it’s as if the pair of them can’t even bring themselves to accept it; it’s just bizarre. I’ve no idea why on earth you’d bring a camera crew in if even an acceptance of the basic facts is still beyond the senior exec team.
Edited by Southerner on Thursday 20th March 16:25
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