Thames Water could be sold to private equity giant KKR

Private equity giant KKR has submitted a bid worth a whopping £4 billion to take a majority stake in Thames Water.

It isn’t just KKR eyeing the UK’s largest water utility, other bidders include big investment firms such as Castle Water, an independent supplier of water to businesses, and CK Infrastructure, part of Hong Kong’s CK Hutchison group.

The news comes after Thames Water won a critical reprieve in London’s High Court, allowing it to raise up to £3bn in high-cost debt. 

The Financial Times reported that KKR does not want to break up Thames Water or sell off assets to raise funds for its bid.

This is a tumultuous time for Thames Water as it seeks to survive amid cash problems. Earlier this week, a High Court judge reluctantly approved a rescue package to prevent the utility provider from running out of cash and being forced into state control.

Justice Leech said that he “might have been tempted” to refuse the plan but for the fact that it is the creditors, rather than customers, who are likely to pick up the “eye-watering” £800 million of legal, financing and advisory costs.

He wrote: “Customers will be horrified at these costs and mystified how the Thames Water Group has been able to fund them or why it has agreed to do so.”