Utilities

Thames Water’s leaky financials are far from fixed

13 Jul 2023

The privately owned UK water company managed to cobble together a rescue from existing shareholders. But in this Viewsroom podcast, Breakingviews columnists discuss why the fresh funds may not be enough, and the threat of nationalisation hangs over the sector as a whole.

Capital Calls: Thames Water, Bayer

10 Jul 2023

Concise views on global finance: The indebted UK utility secured a pledge from shareholders to cough up 750 mln pounds over the next two years; the German conglomerate could help long-suffering investors by undoing the disastrous Monsanto deal.

UK’s leaky water model faces a growing storm

5 Jul 2023

Thames Water’s financial strife has put privately held UK utilities under the spotlight. The sector’s huge investment needs mean bills have to rise yet further. Politicians are likely to ramp up their scrutiny of shareholder returns, and the model of private ownership itself.

UK water meltdown resurrects bank crisis dilemmas

29 Jun 2023

The government may take over indebted 18 bln pound utility Thames Water. Funding a big potential capital hole via bills and taxpayer cash injections could be as politically toxic as 2008-era bailouts of RBS and peers. But imposing losses on creditors may spark even more turmoil.

Capital Calls: Digital euro, Thames Water

28 Jun 2023

Concise views on global finance: Brussels is in a new push to convince EU member states and the European Parliament to endorse a digital euro; Britain’s Thames Water could be placed into special administration.

Dialing it down would help overamped utility

27 Apr 2023

After a busted $2.6 bln takeover deal, expansion into Chile and a huge share slump, Algonquin Power is now contending with two pushy investors. Steady returns are the main appeal of such businesses. Spinning off the renewable energy arm would help restore some boring value.

Capital Calls: FedEx delivers, for now

17 Mar 2023

Concise views on global finance: Shares in the delivery company shot up over 10% on Friday, as cost-cutting measures pay off. Those benefits could easily dwindle.

UK bailout has energy bosses walking on eggshells

13 Feb 2023

Power suppliers like Centrica took billions of pounds of government cash to help customers pay high bills. That leaves them open to charges they pocketed gains and handed losses to taxpayers. For an industry intertwined with the state, pay restraint is vital to self-preservation.

Capital Calls: Centrica

10 Nov 2022

Concise views on global finance: The 5 bln pound UK energy group launches a 250 mln pound buyback despite a struggling supply business and windfall tax threats.

Capital Calls: Uniper

3 Nov 2022

Concise views on global finance: The German utility’s 40 bln euro loss for the first nine months of 2022 has turned its equity negative and implies a much larger bailout.

UK energy bailout leaves key details in the dark

8 Sep 2022

New Prime Minister Liz Truss plans to cap power bills for two years at a likely cost of over 100 bln pounds. It’s unclear how the scheme works, who pays the bill, or what restrictions suppliers will face. What’s certain is Britain has moved further away from a free energy market.

Tough love is best fix for energy cash crunch

7 Sep 2022

Utilities and power traders face a $1.5 trln surge in collateral demands due to swings in gas futures. The answer could be bailouts, halts in trading and collateral tweaks. Yet radical changes may increase risk. And government help, if properly priced, needn’t be a freebie.

Singapore deal offers template for offloading coal

6 Sep 2022

Banks’ aversion to fossil fuels makes it hard for companies to sell dirty assets. So Temasek-backed Sembcorp is financing its own $1.5 bln Indian disposal with an interest rate that falls if emissions do and guaranteeing loans. It’s a more responsible way to get the job done.

Capital Calls: Uniper’s credit request

30 Aug 2022

Concise views on global finance: the German utility asks for a 4 billion euro credit line just weeks after securing a 15 billion euro bailout. But with gas demand easing and a German government levy on consumers yet to go into force, Uniper’s situation may improve.

UK energy’s looming bailout implies a quid pro quo

22 Aug 2022

Britain may subsidise EDF, Centrica and others to curb customers’ utility bills. Power groups are largely not to blame for the mess. But with taxpayers possibly on the hook for over 100 bln pounds, the industry could face blowback like pay curbs and dividend restrictions.

Berlin spreads pain in 15 bln euro Uniper bailout

22 Jul 2022

That’s how much equity and debt the government may pump into the gas importer driven to near-bankruptcy by reduced Russian supplies. Diluted shareholders, Finnish owner Fortum, and German taxpayers will share the burden. So will consumers who will pay higher prices for gas.

Capital Calls: Hasbro’s inflation transformation

19 Jul 2022

Concise views on global finance: The Monopoly maker is scrambling to offset input cost increases and a stronger dollar – but while these pressures might be temporary, increased prices to consumers will last.

France Inc could turn a profit from EDF takeover

7 Jul 2022

President Macron’s administration may have to fork out 7 bln euros for full control of the energy giant. But spinning off its renewable arm could recoup that cash. And the nuclear branch’s long-term investment needs and associated risks are more suited to public ownership.

Uniper investors head for bailout they don’t merit

5 Jul 2022

The 4 bln euro German utility’s value has been smashed by its need to expensively replace Russian gas. Given Berlin is mulling a way to spread this cost, Uniper shares may yet rebound. The outcome may wind up being more generous than its main Finnish shareholder deserves.

Aussie energy crisis demands both carrot and stick

23 Jun 2022

Electricity trading restarted after a week-long hiatus. Canberra wants to pay generators to guarantee supply from 2025. Until then, outages will linger. A windfall tax, or the threat of one, on coal miners and gas drillers like Exxon Mobil and Santos could spark short-term fixes.