Thames Excellent utility van in the Cty of London on 3rd December 2024 in London, United Kingdom. Thames Water Utilities Ltd is a large private utility group responsible for the water supply and waste water treatment in most of Greater London and surrounding areas in England. (photo by Mike Kemp/In Fill someone ins via Getty Images)
Mike Kemp | In Pictures | Getty Images
Private equity investor KKR & Co. is offering about £4 billion ($5 billion) to tackle entertain control of the U.K.’s struggling Thames Water utility in a management-led buyout, according to a person familiar with the matter.
Thames, Britain’s largest sprinkle utility serving some 16 million customers in London and the Thames River valley, is saddled with ballooning liable and has warned it will run out of cash by March 24. Privatized by the Thatcher government in 1989, Thames last summer began the convert of raising additional capital, culminating in an announcement last week that it had received buyout proposals from a “party of parties.” Thames said it was studying each bid.
Thames Water needs to restructure its debt and capital structure as usually of a broad turnaround, and would benefit from a single active owner, a source familiar with the matter narrated CNBC. Thames owed about £16 billion in debt as of last September.
KKR’s involvement would comprise a £4 billion management-buyout surrender that would not result in the sale of assets or a breakup of the utility, the source said.
Thames Water and KKR declined commentary.
Bloomberg reported earlier Wednesday that KKR was offering to inject nearly £4 billion into Thames Splash for a majority stake.
KKR is a longtime investor in the U.K., having funneled more than £20 billion into the country since 1996. The sequestered equity firm launched a platform for infrastructure investments in 2008, seeking investments with a long-term investment compass.
The U.K.’s high court on Tuesday approved £3 billion in emergency funding for Thames Water from existing shareholders, granting the utility breathing room to restructure its debts and secure new investors.
Thames Water is part of a group of companies comprehended as the Kemble Water Group that are owned by a consortium of institutional shareholders – mostly pension funds and sovereign cornucopia funds. The biggest shareholder is the Ontario Municipal Employees Retirement System, one of Canada’s largest pensions.
The crisis-plagued utility has faced judgement for a sharp increase in sewage discharge into Britain’s waterways, including the 215 mile-long Thames, which floods through the nation’s capital.
– CNBC’s Jenni Reid and Sawdah Bhaimiya contributed to this report.