Latest news with #governmentcontrol
The Guardian
an hour ago
- Business
- The Guardian
Put Thames Water into temporary state control, say ‘junior' creditors
Thames Water should be placed into temporary government control to avoid setting a 'deeply troubling precedent', according to bondholders who face losing all of their money in the latest rescue bid. The struggling utility is under the control of a group of lenders who hold the bulk of its huge £20bn debt pile. Those 'senior' creditors on Tuesday revealed details of a last-ditch rescue effort with £5bn in funding, alongside writing off about £6.7bn in debt. However, the plan faces opposition from other 'junior' bondholders, as well as a host of campaigners, who argue that the government should place Thames under a special administration regime (SAR), effectively a temporary nationalisation. The junior bondholders, which include hedge funds such as Polus Capital and Covalis Capital, argued the rescue plan would undermine 'the UK's infrastructure credibility'. Thames Water, the privatised provider of water and sewage services to 16 million customers in London and south-east England, has lurched from crisis to crisis over the past two years as its balance sheet was stretched by expensive debt repayments. At the same time, it is under huge public pressure to stop sewage flowing into rivers and seas. The senior creditors were forced to step in after the US private equity group KKR last week abandoned a bid seen as financially and politically complex. The company will instead be controlled by a group of 100 creditors ranging from big institutional investors such as Aberdeen, BlackRock, Invesco and M&G, to US hedge funds such as Elliott Investment Management and Silver Point Capital. The senior creditors are keen to avoid a special administration that would probably result in most of their loans being written off. The Labour government also wants to avoid imposing a SAR, fearful of the nominal effect on the public finances. However, as part of their rescue bid the senior creditors have asked for leniency from the water regulator, Ofwat, over future fines for environmental failures or criminal breaches of the company's licences. That request for leniency is deeply controversial, as it would allow the senior creditors to escape deeper debt write-offs – potentially allowing some of them to profit immediately. Other water companies across England and Wales would also be likely to ask for leniency themselves. A person familiar with the junior bondholders' thinking said that the bid 'raises serious governance and accountability concerns'. 'The senior creditors are seeking preferential treatment, including unfair immunity from environmental fines, in a process they have engineered to exclude all other stakeholders,' the person said. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The junior bondholders are instead hoping for SAR, which they said would open the Thames Water restructuring process to a 'broader range of competitive, long-term investors capable of delivering a genuine turnaround'. A SAR would probably wipe out the senior creditors' debts, but for the junior creditors it also offers the possibility of being able to invest in Thames Water, potentially allowing them to salvage a financial return.
Yahoo
a day ago
- Automotive
- Yahoo
Cathie Wood says the Musk-Trump feud reveals how much Musk's companies rely on the government
Ark Invest's Cathie Wood has weighed in on the public feud between Elon Musk and Donald Trump. Wood said the feud reveals how much Musk's companies rely on the US government. Trump said Saturday he had no desire to fix his relationship with the Tesla CEO. The public feud between Elon Musk and President Donald Trump has shown investors just how much control the US government has over Musk's companies, Ark Invest CEO Cathie Wood says. "I think the way this is evolving is Elon, Tesla, and investors are beginning to understand more and more just how much the government has control here," Wood said in a video posted to the company's YouTube channel on Friday. Many of Musk's companies have key links to the government and have received billions of dollars in federal loans, contracts, tax credits, and subsidies over the years. "Elon is involved in companies that are depending on the government," Wood said, pointing to Tesla, SpaceX, and Neuralink as examples. SpaceX's COO, Gwynne Shotwell, said last year that the company has $22 billion worth of federal contracts. Neuralink, Musk's brain chip company, is subject to FDA regulation, and a less friendly regulatory environment could impact Tesla's robotaxi rollout plans. Tesla stock fell more than 14% on Thursday after Musk and Trump became locked in a series of increasingly bitter clashes. The feud appeared to begin, at least publicly, on Tuesday, after Musk criticized Trump's "One Big Beautiful Bill." He called it a "disgusting abomination" and said it would increase the national budget deficit. Tensions rose fast between the once-close allies on Thursday. Trump threatened to cut Musk's government contracts and Musk said SpaceX would immediately begin decommissioning its Dragon spacecraft — which returned stranded NASA astronauts Suni Williams and Butch Wilmore from the International Space Station in March. Musk later retracted that threat, which Wood said was a sign he was "beginning to walk this back." Wood said the rift with Trump could, in part, be Musk's attempt to further decouple himself from the Trump administration. Musk announced in April that he would be stepping back from his government work. "One of the hypotheses out there is that what has happened was partly — not entirely — orchestrated," Wood said. "Clearly, there has been some brand damage to Tesla, which he readily admits, and I think he's trying to disengage from the government and being associated with one party or the other." Moving forward, Wood said neither Trump nor Musk needed to get "bogged down" with a fight and that she believed both would eventually heed that reasoning. She also appeared to be confident that Musk could make the situation work for him. She said Musk "works really well under pressure" and that "he creates a lot of that chaos and pressure himself." Trump, however, signaled Saturday that he had no desire to fix his relationship with the SpaceX CEO anytime soon. "I have no intention of speaking to him," Trump told NBC News. "I think it's a very bad thing, because he's very disrespectful. You could not disrespect the office of the President," he added. Vice President JD Vance struck a somewhat friendlier tone when asked about the possibility of reconciliation during a Thursday interview with podcaster Theo Von. Vance said that while he thought it was a "huge mistake" for Musk to "go after the president," he hoped Musk "figures it out" and "comes back into the fold." Read the original article on Business Insider
Times
22-05-2025
- Business
- Times
Trump ‘seriously considering' taking mortgage giants public
President Trump has floated the possibility of taking Fannie Mae and Freddie Mac public, 17 years after the mortgage giants were placed under government control during the global financial crisis. Fannie and Freddie play a central role in the US housing market by guaranteeing mortgages and keeping down the cost of loans. The US government took control of them in 2008 as they started suffering heavy losses amid the collapse of the housing market. Privatising Fannie and Freddie could create a windfall for the US government. The valuation of the privatised entities has been estimated at $330 billion and the government's stake has been valued at $250 billion. In a post on Truth Social on Wednesday, Trump said he was giving 'very serious consideration' to
