KKR, a leading private equity firm, is actively pursuing a plan to rescue Thames Water, Britain's largest water supplier, from its financial crisis. The company is facing a £19 billion debt burden and the possibility of nationalization. KKR is exploring a substantial equity injection to help Thames Water stabilize its situation.
KKR , one of the world's largest private equity firms, is moving ahead with plans to play a pivotal role in rescuing Britain's biggest water supplier, Thames Water . With over $600 billion in assets under management, KKR has retained investment bankers and lawyers to formulate a plan involving billions of pounds in equity injection into the struggling company, which serves over 15 million customers.
PJT Partners has been appointed by KKR to advise on its interest in Thames Water ahead of a proposal deadline for an equity raise later this month. This appointment suggests KKR's serious consideration of aiding Thames Water's rescue, which is currently burdened with £19 billion of debt and faces the possibility of temporary nationalization amidst a contentious legal battle among rival creditor groups. Thames Water is caught in a high-stakes legal battle at the High Court, beginning on Monday. One syndicate of lenders seeks to extend up to £3 billion in financing, while another group proposes an alternative plan that they claim is more cost-effective. If Thames Water fails to secure new financing, it could be forced into special administration, an insolvency process previously used in the UK for the domestic energy supplier Bulb. This process would likely cost the government billions of pounds while the company is restructured or a buyer is found. Sir Keir Starmer's government has expressed its desire to avoid this outcome. However, political pressure is mounting from critics who argue that Thames Water should not be allowed to further increase its debt burden. Charlie Maynard, the Liberal Democrat MP for Witney and a long-standing advocate for water company regulation reform, has submitted a witness statement to the court urging the rejection of a restructuring plan backed by Thames Water's board. 'Successive governments have watched on as Thames Water has plunged themselves into billions of pounds of debt,' Mr Maynard said. 'Thames Water is running out of money, it is operating in breach of its licence, it is unable to pay its debts and its customers are suffering for it. 'The deal the creditors are pushing for serves their interests only; it is a short-term fix at the expense of the company, Thames Water customers and UK taxpayers.' Approval of the £3 billion debt financing would provide the company with time to raise new equity. Besides KKR, several other investors, including CK Infrastructure Holdings, Covalis, and Castle Water, have been linked with potential offers. Industry sources suggest that KKR and CK Infrastructure appear to be the most credible candidates for an equity raise, although there is no guarantee that any of these interests will materialize into concrete proposals. The involvement of KKR comes as Thames Water faces a critical decision regarding the potential appeal of an Ofwat ruling on its spending plans for the next five years. Thames Water had requested permission to increase prices for customers by 53% over five years but was informed by the industry regulator that the increase would be capped at 35%. Several other water companies are also considering appeals. Last autumn, the environment secretary, Steve Reed, established an independent review of the water industry that will explore far-reaching reforms. It remains unclear which of KKR's funds is participating in the Thames Water equity-raise process, which is being managed by bankers at Rothschild. KKR owns John Laing, an infrastructure investor, acquired in 2021. The firm also previously owned South Staffordshire, another water company, selling its 75% stake in 2018. KKR declined to comment on the matter
KKR Thames Water Private Equity Water Crisis UK Economy Debt Restructuring Nationalization Ofwat Water Regulation
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Junior Bondholders Accuse Senior Creditors of Predatory Tactics in Thames Water Rescue PlanA group of junior bondholders at Thames Water has challenged the proposed £3bn emergency loan from senior creditors, alleging predatory conditions and an attempt to circumvent regulatory oversight. The bondholders are seeking court approval for their own rival plan, raising concerns about the company's financial stability and the potential for nationalization.
Read more »
Thames Water: MP slams 'outrageous sewage dumping''Loo paper' and 'what looks like condoms' were visible in the water, says the MP in a video.
Read more »
Estimated cost of Thames Water renationalisation questionedUsing government loans to Bulb as a comparison gives exaggerated forecast, experts claim
Read more »
Residents Accuse Thames Water of Ignoring Months of Complaints Before Burst PipeResidents in Caversham Heights, Berkshire, have accused Thames Water of failing to address their concerns about water leaks and potential problems in the area for months before a burst pipe caused a road collapse and water outages. While Thames Water claims to have investigated previous reports, residents say they were left without adequate communication and support.
Read more »
Thames Water faces fresh legal challenge over £3bn creditor loanEnvironmental campaigners argue it makes more sense for debt-laden utility to be temporarily renationalised
Read more »
Thames Water bidders cautious over deal - what could it mean for billsBidders are calling for Thames Water’s creditors to accept steep losses before rescuers provide new equity
Read more »