Burnham, take note: water shareholders have their uses – they can be squeezed for cash | Nils Pratley

From the source

Water is “a service where the shareholders never lose and the public never win,” Andy Burnham, the prime minister, told the Labour party conference last week, reflecting the popular feeling towards the industry in England. And, of course, his big-picture point is familiar: the £80bn, or thereabouts, that has been paid in dividends over the past 35 years represented over-the-top rewards for investors in many cases. It is easy to agree the public was taken for a ride. But the idea that shareholders never lose is not correct – and has been out of date for a while. For starters, the current owners of Thames Water have been wiped out. Their shares are worthless whatever the outcome of the interminable talks over whether to put the company into administration or opt for a recapitalisation by the creditors (who will get a sharp haircut on their debt in all circumstances). Meanwhile, the owners of Southern Water have been obliged to shove in cash on dilutive terms. Now comes something…

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