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Thames Water has selected the US investment capital group KKR as its favorite tenderer to take control of the UK’s greatest water service and help their battle against renationalization.
KKR, who is already a shareholder of Northumbrian Water, had submitted a preliminary offer of 4 billion pounds sterling To take a majority participation in Thames Water earlier this year.
The decision means that the interests of rival suitors, in particular Covônis, Castle Water and CK, will not be taken care of at this stage, according to a person close to the company.
Thames Water, which serves 16 million people through London and the Thames Valley, rushed to raise new equity after its owners of pension funds and sovereigns have moved away from supporting public service last year and of it declared it useless, provoking a financial crisis.
The company, which is the largest aquatic utility in the United Kingdom, has difficulties of less than 20 billion pounds sterling and has an urgent need for many improvements in infrastructure extended to its creak network. Friday, Alastair Cochran, the group’s financial director, announced his unexpected resignation.
Thames water said on Monday that after having evaluated the proposals received, he had chosen KKR “to enter phase 2 of the diligence” of his capital collection process as a favorite partner. There was no certainty that a binding proposal would be made by KKR, added the public service.
KkrThe class A class A proposal for class A class A of class A class A of public service, which is owned by American investment groups such as Elliott Management and Pimco as well as British asset managers such as Berdeen, said Thames Water.
The US investment group has discussed offering these bonds the opportunity to invest in the equity of Thames Water in exchange for a stay, according to people close to the discussions. The KKR would also have offered less severe haircuts to bonds than CKI.
The company is seeking to agree on a equity contract by June, with the final breakdown due by September in a process managed by the Rothschild investment bank.
While Thames Water accepted a loan ranging from 3 billion pounds sterling from his class A to avoid a treasuryHe needs the approval of bond holders to access money before a potential legal challenge. The deadline for this approval process later fell on Monday, the public service expecting to be able to start to rely on the loan in early April.
The loan could then be subject to another contestation of the Supreme Court of a group of creditors or rival environmentalists led by the liberal-democratic deputy Charlie Maynard.
KKR has a 25% stake in Northumbrian Water, which calls for competition and the UK markets on its price establishment with the water regulator ofwat. The water from the Thames had also announced a call To the extent to which it could increase customer invoices, but later delayed it so as not to slow down the actions elevation process.
Ofwat said in December that Thames Water could increase invoices by 35% by 2030 – which meant that household bills would increase £ 151 to £ 639 on average this year.
