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Severn Trent boss invites utilities to secret meeting to avert nationalisation

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece from The Financial Times here or enjoy below!

🗞️ Driving the news: The Universities Superannuation Scheme (USS), a major investor in Thames Water, expressed support for the utility’s turnaround plan
•The statement sets the stage for crucial negotiations between Thames Water, its investors, and the government regarding additional capital injection amidst ongoing political debates about the sector’s future and potential nationalization

🔭 The context: Thames Water —the utility company that supplies water and sewage services to 15 million individuals in London and the southeast  — announced a year ago that it wanted to raise £1.5bn from its existing shareholders but has raised only £500mn, leaving a £1bn gap
• The company is grappling with escalating interest payments on a portion of its £14 billion debt, though sources near the firm maintain that there’s “no immediate liquidity crisis”
Thames Water stated that it had a liquidity pool of £4.4 billion as of the end of March

🌎 Why does it matter for the planet: Concerns over Thames Water’s financial stability have intensified discussions about the ownership of water utilities
• Critics argue that access to water should be a public good
Shareholders are worried about the substantial investments required to address public outrage over sewage flows into rivers and pipe leaks

⏭️ What’s next:Negotiations between Thames Water, investors, and the government will be crucial to determine the future course of action• 
The government is prepared for a potential taxpayer rescue of Thames Water
• Water industry leaders are concerned that the failure of one utility could erode confidence across the sector
Liv Garfield, CEO of Severn Trent, another water company, called for utility companies to collaborate and explore options to prevent the possibility of nationalization

💬 One quote: “Whilst it is clear Labour will not include nationalization in its next manifesto, they are also not keen on entering into the election race championing the status quo... One idea we believe might be attractive to the Labour leadership is repurposing utilities and utility networks into a new breed of declared social purpose companies” - Liv Garfield, CEO of Severn Trent.

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