Crypto News: Labour makes a splash

At times the standoff between Thames Water, its backers and the government has been pretty tedious. Like watching a dripping tap, you might say.

The maligned company's future is financially unfeasible, as things stand, with Thames needing £3.3 billion just to avoid running out of money by the end of May. (For context: that's enough to buy Chelsea Football Club — one of Thames' many customers.)

Investors haven't been massively keen on putting such a large chunk of money into a company that is "uninvestible" according to its own CEO and shareholders. And no government wants the political fallout from massive hikes to water bills or a huge hit to taxpayers at a time of supposed fiscal restraint.

Hence, deadlock, for months and months. Until now.

Photographer: Christopher Furlong/Getty Images Europe

My colleagues on Bloomberg's credit desk revealed today that debt-holders are drawing up plans to rescue the company. They hold around £10 billion of Thames' notes and have presumably decided that it's too risky to sit quietly on the sidelines.

The timing is impeccable, coming on the day that the government unveiled a new bill to punish polluting water companies, clamp down on bonuses — and, most importantly, claw back extra cash if it is forced to temporarily nationalize a big utility like Thames.

Since coming to power, Business Secretary Jonathan Reynolds has insisted that the private sector should shoulder the cost of Thames' plight. He and Environment Secretary Steve Reed have resisted calls from the left of the party to bring the company into full public ownership, arguing that this would simply risk a taxpayer-funded bailout.

Next week Reed will turn the spotlight on investors again, with showdown talks on how to extract more funds for the water industry. It needs a "huge quantum of investment," he told Bloomberg today. Labour will even use October's big investment summit to seek out private sector cash for Thames.

We're still a long way from the end of this game and there are poker faces all around the table. But Labour has played its hand well, and some investors — at least — seem to be convinced that Reynolds and his colleagues are not bluffing.

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