A Hong Kong company has submitted an initial £7 billion bid for a majority stake in Thames Water, a heavily indebted UK water supplier, the Financial Times said Friday.
CK Infrastructure, part of the CK Hutchison group, put forward the non-binding offer earlier this month, but expects the utility’s bondholders to take significant writedowns, according to two people close to the issue.
The news came after a UK court on Tuesday approved a £3 billion emergency loan for Thames Water, offering it a lifeline as it buckles under a mountain of debt.
The loan provides a short-term solution to keeping the company faced with debts of £16 billion afloat while it finds the necessary funding to stave off a costly public bailout.
Thames Water did not comment on the FT report when asked by AFP.
If the company that serves 16 million customers, or a quarter of the UK’s population, fails to find the funding, it will have to call on the state to bail it out.
Such a rescue would be a blow to the government in the face of tight public finances.
Thames Water owned by a consortium of shareholders including Canada’s Ontario Municipal Employees Retirement System and the British Universities Superannuation Scheme has recently attracted interest from private buyers.
Infrastructure investor Covalis Capital proposed an upfront buyout offer of £1 billion, with the potential to bring in French utility giant Suez.
According to the Financial Times, Thames Water has also received other offers including a £4 billion bid from American investment fund KKR.
source: AFP
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