Thames Water - Case Update

Thames Water has selected Kohlberg Kravis Roberts (KKR) as its preferred bidder, with the US private equity firm expected to acquire a majority stake in the distressed utility in the second half of the year.

In February, the Court sanctioned the Part 26A restructuring plan proposed by Thames Water. The plan contemplated a £3 billion emergency funding package from its senior creditors to give the company time to find a more long-term solution. The Court of Appeal upheld the plan last month.

Now, the company has announced that, following a detailed assessment of the six proposals received, it has selected KKR to enter the Phase 2 diligence stage of the equity process as preferred partner.

Thames Water has not provided much information on KKR’s proposal, but KKR is believed to have made an equity bid of £4 billion in return for a majority stake. Unlike other bidders, KKR is not believed to have plans to break the company up.

The deal is not a certainty and remains subject to finalisation, which is expected to occur in the second quarter, with completion targeted for the second half of the year.