Thames Water is currently trying to restructure its heavily indebted balance sheet, a challenge compounded by the necessity for lender concessions and court approvals. A significant misstep arose when Thames's board revealed an executive retention scheme without securing prior approval from regulators or the government, triggering backlash and scrutiny. As the government and regulatory body Ofwat were unaware of this scheme, it prompted a swift decision to pause the retention payouts amid fears that such actions could undermine the company's precarious restructuring efforts and escalate political tensions.
The effort to restructure Thames Water's balance sheet is complex and time-consuming, primarily dependent on lenders agreeing to write off losses and regulatory approvals.
Thames Water's decision to reveal a retention scheme for executives without prior approval highlights a misjudgment in a politically sensitive situation.
In a climate of heightened scrutiny and regulatory power regarding bonuses, Thames Water's handling of its retention scheme could jeopardize its restructuring efforts.
The chaotic management of the retention payments has put Thames's crucial resuscitation efforts at a significant risk of failure.
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