Proactive Investors - 7.07am: Government monitoring Thames Water as debt concerns mount
The government has begun drawing up contingency plans for the collapse of Thames Water amid growing doubts in Whitehall about the ability of Britain’s biggest water company to service its £14bn debt-pile, according to Sky News.
Sky has learnt that ministers and Ofwat, the industry regulator, have started to hold discussions about the possibility of placing Thames Water into a special administration regime that would effectively take the company into temporary public ownership.
Such a process was used when the energy supplier Bulb collapsed in 2021.
On Tuesday, Sarah Bentley, its chief executive for the last three years, resigned with immediate effect, saying: "The foundations of the turnaround that we have laid position the company for future success to improve service for customers and environmental performance."
The Daily Telegraph reported on Tuesday night that Thames Water was still trying to raise £1bn from shareholders and that AlixPartners had been drafted in to advise on the company's operational turnaround plans.
Thames Water is owned by a consortium of pension funds and sovereign wealth funds, many of which are understood to be sceptical about delivering additional funding.
Its largest shareholder is Ontario Municipal Employees Retirement System which holds a stake of nearly 32%, according to Thames Water's website.
Others include China Investment Corporation, the Universities Superannuation Scheme and Infinity Investments.
Thames Water serves 15mln customers across London and the south-east of England, and has come under intense pressure in recent years because of its poor record on leaks, sewage contamination, executive pay and shareholder dividends.
7.00am: FTSE 100 expected to push higher on brighter global economic picture
The FTSE 100 is expected to open higher on Wednesday after gains in the US after a batch of surprisingly robust economic data.
Spread betting companies are calling London’s lead index up 25 points from Tuesday’s close of 7,461.46.
Consumer confidence, housing sales and durable goods orders all surprised on the upside boosting hopes that the world’s largest economy may yet swerve a recession.
There was also better news on global inflation with weaker than expected figures in Australia and Canada.
The Australian Bureau of Statistics said that inflation eased to 5.6% from 6.8%, with petrol prices dropping by 8%.
In the US, the Dow Jones Industrial Average rose 212.03 points, or 0.6%, at 33,926.74. The S&P 500 gained 49.59 points, or 1.2%, at 4,378.41, and the Nasdaq Composite jumped 219.89 points, or 1.7%, at 13,555.67.
In Asia, the Nikkei in Tokyo rose strongly while the Shanghai Composite in Beijing and Hang Seng in Hong Kong edged lower.
Back in London, and utilities will be in focus on reports the government has started drawing up contingency plans for the collapse of Thames Water amid growing doubts in Whitehall about the ability of Britain’s biggest water company to service its £14bn debt-pile.
Sky reported the news which comes after Thames Water CEO, Sarah Bentley, resigned.
The Telegraph reported on Tuesday night that the firm was still trying to raise £1bn from shareholders and that AlixPartners had been drafted in to advise on the company's operational turnaround plans.