Thames Water has managed to raise £750 million in new equity. Unfortunately, this is less than the £1 billion it was after and a lot less than the estimated £2.5 billion needed to deliver its turnaround plan. So, what’s next for the struggling utility? My suggestion is to wipe out bondholders and force a merger with UBS.

The lowdown

• ⚔️ Carl Icahn restructures $3.7 billion in loans following short seller attack.

• 🏦 Fed outlines tougher capital rules for banks with more than $100 million in assets.

• 💧 Thames Water secures £750 million equity injection, though it is less than the £1 billion it was after.

Featured story

Ant Group’s enormous fine

On Friday, it was announced that Ant Group had been fined nearly $1 billion by Chinese regulators due to corporate governance and other failures by the company – part of a wider regulatory crackdown on China's tech sector.

The fine further dents Ant Group's valuation, which fell from $315 billion at its planned IPO in 2020 ($) to $78.5 billion after a share buyback was announced over the weekend. Ant has offered to buy back 7.6% of its equity, which would allow some investors – e.g. Alibaba, which holds a 33% stake – to exit.

The resolution of the regulatory issues has restarted discussions about the potential for an IPO. It is uncertain whether IPO plans would be put into place at the same time as a share buyback. One thing is for certain, though: it would not be at a $315 billion valuation.

The content we're consuming today

• Editors Picks from The Economist podcast: July 10th 2023.

• The Memo by Howard Marks podcast: Taking the Temperature.

• FT Alphaville: Does private equity improve companies?

Off-balance sheet items

• I read this article about Mattel’s $100 million Barbie movie ($) and then felt like I had to watch the trailer – it was not what I was expecting and contains the tagline, ‘If you hate Barbie, this movie is for you.’

The bottom line