Hong Kong’s CK Infrastructure has made a preliminary bid of £7 billion to acquire a majority stake in Thames Water. This move comes amid significant challenges facing the utility, as CKI wants its bondholders to accept large reductions in their claims.
CKI, which is part of the CK Hutchison group, submitted its non-binding offer earlier this month, according to sources close to the matter. The proposed investment is aimed at stabilizing Thames Water’s finances, which are currently troubled due to a heavy debt load.
The company is grappling with nearly £20 billion in debt, and in order to move forward, CKI requires that bondholders agree to substantial reductions in what they are owed. This requirement could complicate negotiations and the overall acquisition process.
Additionally, CK Hutchison’s current ownership of a 75% stake in Northumbrian Water could pose regulatory challenges, as competition regulators may have concerns about the overlap in ownership of two regional water companies.
Thames Water has fielded several bids this month, including a rival offer of £4 billion from the US private equity firm KKR. Currently, the UK’s largest water utility is seeking to raise funds while working on restructuring its debts to prevent insolvency.
Thames Water has not made any comments regarding the bid, and CKI has also not responded to requests for further information at this time.
This situation is still evolving, and further developments are expected.