Business
Thames Water lenders submit rescue plan to stave off collapse
Michael RaceBusiness reporter
Getty ImagesThames Water’s lenders have submitted a new rescue plan to prevent the UK’s largest water company from collapsing.
London & Valley Water, a consortium of large financial institutions and investors, has submitted proposals which include writing off about a third of the company’s near £20bn debt pile and investing an initial £5.4bn to stabilise its finances.
Fears that Thames could collapse first emerged more than two years ago, and the government has been on standby to supervise a form of temporary nationalisation.
But the firm’s investors said its plan would rebuild the company without the need for any taxpayer funding or government support.
The company serves about a quarter of the UK’s population, mostly across London and parts of southern England, and employs 8,000 people.
But it has faced heavy criticism over its performance in recent years over a series of sewage discharges and pipe leaks. In May, it was handed a £122.7m fine, the biggest ever issued by the water industry regulator, for breaching rules on sewage spills and shareholder payouts.
London & Valley Water said on Thursday that its plan was the “fastest and most reliable route” to turn around Thames, clean up waterways and rebuild public trust.
Investors said they would inject an initial £5.4bn into the company to shore up its finances and support future investment, but they suggested the cash injection needed to be set against “stretching but achievable and realistic performance targets”.
All water companies are subject to performance targets over leaks, pollution incidents and customer satisfaction levels.
London & Valley has argued the current targets in place for the company are unachievable and its current business plan needs to be adjusted in order for Thames to attract future investment, rebuild the company and improve its performance for customers.
It said under its proposals no dividends would be paid out to shareholders over the duration of the turnaround plan and that new shareholders would commit not to sell the business prior to March 2030.
Outstanding fines would also be paid, they added.
London & Valley Water said it aimed to reach an agreement with Thames and water industry regulator Ofwat “as quickly as possible this autumn given the urgent need to stabilise Thames Water”.
Mike McTighe, the proposed future chair of Thames Water under the terms of plan, said “from day one, we will inject billions in new investment”.
He added that under a new company board, there would be a focus on “reducing pollution and rebuilding public trust so that by the end of this decade Thames Water can once again be a reliable, resilient, and responsible company”.
Ofwat said it would review the latest plans.
In response to the proposals, Chris Weston, chief executive of Thames Water, said the announcement marked an “important milestone” in the company’s work to resolve its debt problems and secure its finances to “support the investment and performance improvements our customers expect”.
The revised turnaround proposals come after Thames suffered a major blow in its attempt to secure its future this summer when US private equity firm KKR pulled out of a £4bn deal.
In July, the boss of Thames Water, Chris Weston, said the company was “extremely stressed” and that it would take “at least a decade to turn around”.
Water bills for households in England and Wales have risen by £10 per month on average this year, although costs vary depending on suppliers. The bills for Thames Water’s customer have gone up from £488 to £639 a year on average.
Four major players in the travel industry have had their adverts banned by the Advertising Standards Authority (ASA) for misleading customers.
The ASA ruled that Booking.com and hotel groups Accor, Travelodge, and Hilton all used “from” price claims for hotel rooms that overstated how many were available at the advertised rate.
With only a limited proportion of rooms genuinely offered at the advertised prices across various dates, the ASA deemed the promotions misleading and consequently prohibited their future use.
In Booking.com’s case, an ad on May 6 stated “Places to stay in Sheffield – Best Price Guarantee, and further text read “easyHotel Sheffield City Centre From £28”.
Booking.com said the dates and prices displayed were “dynamically chosen” by Google from data it provided, meaning they could vary for each user and search.
They believed the information displayed in the ad was accurate and not misleading.
The ASA said the data Booking.com provided showed that seven bookings were made at the easyHotel Sheffield City Centre for the advertised price in May.
It said it did not receive any other information from Booking.com, such as the number of dates on which rooms were available for £28, to enable us to make an adequate assessment of the proportion of rooms at the hotel available at the advertised price and therefore considered that the information provided was insufficient to substantiate the claim “From £28”.
The watchdog found Accor’s ad for £27 rooms at its Ibis Budget Birmingham Centre were only available for a night’s stay on July 30, and was therefore “not a true reflection of the price most consumers could expect to pay”.
It said consumers would understand the claims “Travelodge Nottingham Riverside From £25” and “Travelodge Swansea M4 From £21” to mean that a significant proportion of rooms at each hotel would be available at the advertised price.
However, it understood that the advertised prices were only available to book for a night’s stay on May 18.
In Hilton’s case, the ASA said it had not seen sufficient evidence to demonstrate that a significant proportion of hotel rooms were available at the advertised prices of £68 at Hampton by Hilton Hamilton Park or £59 at Hampton by Hilton Newcastle.
ASA operations manager Emily Henwood said: “Advertised prices must match what’s really available.
“If only a few rooms are actually offered at the price shown, or it only applies to a specific date, then this information must be made clear to avoid misleading people.
“Otherwise, it’s unfair to anyone trying to find a good deal or make informed choices about where to book.
“People should be able to trust the prices they see in ads and these rulings show that we will take action if the rules are broken.”
Travelodge said in a statement: “Travelodge takes its responsibilities under the ASA advertising guidelines seriously. The prices shown in the ads were generated from our live pricing feed and represented the cheapest bookable date available.
“We recognise that customers expect clarity and transparency in pricing, and we continue to work closely with Google to ensure all ad formats are clear and fully compliant. This particular ad format was removed prior to the ASA ruling, and we remain committed to transparent, accurate, and great-value pricing for all our customers.”
D.R. Horton signage stands in front of homes under construction at the Eastridge Woods development in Cottage Grove, Minnesota.
Daniel Acker | Bloomberg | Getty Images
A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
D.R. Horton, the nation’s largest homebuilder, is tapping an artificial intelligence tool from Portland, Oregon-based startup Prophetic to build more homes and address the country’s housing shortage.
Chronic underbuilding since the Great Recession has caused a deficit of roughly 4 million homes, according to analyses from several sources, including Zillow. The supply-demand imbalance has caused prices to rise over 50% from pre-pandemic levels.
Homebuilders are trying to respond but say that the cost of construction, along with the difficult and costly process for acquiring and developing buildable lots, is making that difficult.
“One of the largest challenges to providing affordable housing is the identification, acquisition and entitlement of land suitable for development. We are confident the insights provided by Prophetic are going to help us expand homeownership opportunities for hard-working American individuals and families,” said Jason Jones, vice president of data analytics at D.R. Horton, in a release.
Prophetic has developed an AI-native platform for land acquisition and development analysis. For any potential parcel of land, Prophetic’s software will pull every single zoning manual from every city and county in a state. The company said it is currently operational in 25 states and expects to be in all 50 by June.
“It’s an incredibly large, tedious, detail-oriented process to take tens of thousands of these zoning documents and extract the rules, not only efficiently, but correctly,” said Oliver Alexander, founder and CEO of Prophetic.
Among other things, the system looks at minimum lot size and minimum or maximum density setbacks, which differ by municipality and zone. It updates those quarterly.
“Then it tells you where that information came from, which is the key differentiator,” Alexander explained. “When you have that section title and the page that it came from, that builds trust, and then it becomes ultra-efficient, where you can analyze development potential in 30 seconds instead of two to three hours.”
Alexander said there are a little over 440,000 different ways to describe what you’re allowed to do on a piece of dirt in the states Prophetic has analyzed. Developers need to go through all of that information to figure out if they can build a single- or multifamily housing development on it.
The AI’s large language model-based analysis of these documents at scale can answer the questions and then feed that into search AI, which Alexander calls “the major unlock” – search plus the zone AI information together. At the ground level, with this AI, builders can figure out what they can build, where and how much at a much faster pace, making them more competitive with landowners.
“If you have that much of an edge in your speed to decision, you effectively control your entire market, because before anyone else can decide, you’ve tied it up,” said Alexander.
MUMBAI: Representatives of India’s capital market on Tuesday urged finance minister Nirmala Sitharaman to keep the securities transaction tax (STT) on cash equity lower than that of equity derivatives trades in the forthcoming Budget. They also suggested to the ministry that in case of a buyback of shares, tax should be imposed only on profits and not on the total buyback value, sources said. Currently, STT in the equity cash market ranges from 0.025% to 0.1% while in the derivatives market the rates are between 0.125% and 0.1%. A lower rate in the cash segment could lead to more participation in the segment compared to the derivatives section. Of late, govt, policy makers and regulators are looking at ways to rein in trading and speculative habits of retail investors using equity derivatives products, especially options.On Tuesday, the group of people also suggested to the finance minister that the rate of short-term dividend tax which domestic investors pay should be in line with what NRIs pay. tnn
Pete Davidson opens up on moment he knew Elsie was ‘the one’
Giants’ Cam Skattebo responds after criticisms for viral incident with WWE stars at ‘Monday Night Raw’
Adverts for Booking.com and three major hotel chains banned over misleading prices
-
Tech1 week agoFrom waste to asset: Turning ethanol production CO₂ into jet fuel
-
Tech3 days agoNew carbon capture method uses water and pressure to remove CO₂ from emissions at half current costs
-
Politics5 days agoBritish-Pakistani honoured for transforming UK halal meat industry
-
Sports3 days agoTexas A&M officer scolds South Carolina wide receiver after touchdown; department speaks out
-
Business4 days agoThese 9 Common Money Mistakes Are Eating Your Income
-
Business4 days agoWhat’s behind Rachel Reeves’s hokey cokey on income tax rises?
-
Tech1 week agoSecurity flaws in portable genetic sequencers risk leaking private DNA data
-
Fashion6 days agoAdidas & Patrick Mahomes expand NIL programme with Texas Tech athletes