KKR Offers £4 Billion for Majority Stake in Beleaguered Thames Water
KKR & Co. has proposed a £4 billion ($5 billion) investment for a majority stake in Thames Water, the cash-strapped water and sewage company that serves London and its environs.
According to sources familiar with the matter, the US alternative asset manager plans to inject the funds without divesting any of Thames Water's assets or implementing structural changes.
KKR's offer joins a pool of potential suitors for the utility, which has faced significant financial challenges under its existing shareholders. Castle Water Ltd. and infrastructure investor Covalis Capital have also expressed interest.
Deliberations are ongoing, and a deal may not materialize. Representatives from Thames Water and KKR declined to comment.
Thames Water has sought fresh equity to address its £16 billion debt burden. Without additional capital, it could enter special administration, a process akin to insolvency for critical service providers.
On Tuesday, the company secured an emergency loan of £3 billion from its senior creditors, providing temporary relief but requiring a long-term solution.
KKR has emerged as a key player in global infrastructure investments, with billions allocated to assets such as power networks, solar energy, and data centers. The firm has consolidated its infrastructure and real estate assets under one leadership, aiming to capitalize on synergies between these growing sectors.
Launched in 2008, KKR's infrastructure business has grown to $77 billion as of September 30, 2023, from $13 billion five years prior. It generated an 18% return in the 12 months ending September 30, making it the firm's most profitable segment.