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BREAKING: The government has begun drawing up contingency plans for the collapse of Thames Water amid growing doubts. (twitter.com)

submitted 1 year ago by sabreW4K3@lemmy.tf to c/uk_politics

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[–] SNEWSLEYPIES@lemm.ee 3 points 1 year ago (1 children)

that totally normal corporate financing

The point, I think, is that it perhaps ought not to be.

[–] julietOscarEcho@sh.itjust.works 0 points 1 year ago (1 children)

Why? Are you not allowed to give gifts to your family until you pay off your mortgage? Paying dividends while using debt financing isn't inherently imprudent. I would have preferred vital services to remain in the control of the state and think the regulators have been laughably weak in allowing these companies to enfeeble themselves to the benefit of shareholders and ultimate cost to society, but demanding dividends not be paid until a company is debt free, in our current capitalist system (and any remotely similar system) is financially illiterate.

[–] SNEWSLEYPIES@lemm.ee 0 points 1 year ago (1 children)

Your analogy is a little off. If I were in the slightest danger of defaulting on my mortgage, you may be assured that even my closest family would be getting handwritten free hug vouchers for christmas.

It's not about being debt free, it's about not using your debt for stupid things.

[–] julietOscarEcho@sh.itjust.works 0 points 1 year ago (1 children)

Right but if you were not in any danger of default they would think you a dick if you spent nothing on gifts. You're moving the goalposts. The statement was that no dividends should be paid while there is any debt, which as I say is a stupid one.

[–] SNEWSLEYPIES@lemm.ee 0 points 1 year ago* (last edited 1 year ago) (1 children)

On the contrary, I'm putting the goalposts back where they were before you misunderstood them.

From the article:

Hall concludes the companies have borrowed to pay dividends, rather than to invest in infrastructure projects. The £123bn of capital expenditure spent by the companies has all been financed by customer bills, the analysis states.

[–] julietOscarEcho@sh.itjust.works 0 points 1 year ago* (last edited 1 year ago)

Read the thread you're commenting on mate.

Under no circumstances should a company be borrowing and paying dividends at the same time

I have no objection to particular instances of imprudent dividend paying being criticised. I specifically rejected this absolute statement.