How Macquarie bank left Thames Water with a £2bn debt
How Macquarie bank left Thames Water with a £2bn debt: The Australian bank Macquarie has left Thames Water with an extra £2bn debt burden, an investigation shows. The £2bn was borrowed by Thames Water in 2007 and 2010 but used for the benefit of the bank and its investors, which owned and controlled the UK’s biggest privatised water company.
This was in apparent contravention of conditions laid down by the regulator when Macquarie bought Thames in 2006.
Macquarie told that its ownership had made Thames financially stronger.
The bank and its investors sold their last share of Thames Water in March this year.
In analysis undertaken for the, Martin Blaiklock, a consultant with international experience of privatised utility funding, concluded that under Macquarie’s control, the total returns made by the bank and its investors from Thames Water averaged between 15.5% and 19% a year.
Mr Blaiklock has 40 years of experience in such matters and said these returns were “twice what one would normally expect”.
Macquarie disputed Mr Blaiklock’s estimate of the total returns paid by Thames to Macquarie and its investors.
The bank referred to the 12.3% internal rate of return earned by its European Infrastructure Fund, of which their investment in Thames Water was a part.
Mr Blaiklock says that’s not an appropriate measure of what Thames paid.
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