Thames Water Has Just Two Rescue Bids With Equity Deadline Hours Away

Yahoo

10-02-2025

(Bloomberg) -- Today marks the deadline for investors to submit rescue bids for Thames Water but uncertainty over the emergency restructuring of the company is overshadowing the equity raise process.
Nice Airport, If You Can Get to It: No Subway, No Highway, No Bridge
Sin puente y sin metro: el nuevo aeropuerto de Lima es una debacle
The Forgotten French Architect Who Rebuilt Marseille
In New Orleans, an Aging Dome Tries to Stay Super
How London's Taxi Drivers Navigate the City Without GPS
By the end of last week, only Castle Water Ltd. and infrastructure investor Covalis Capital had confirmed their interest, according to people familiar with the matter. The lack of clarity is keeping potential investors like KKR & Co. and CK Infrastructure Holding on the sidelines, the people said, asking not to be named because the talks are private.
Thames Water, Castle Water, Covalis, KKR and CKI all declined to comment on the equity raising process.
The UK's largest water and sewage company has been looking to raise new equity after its existing shareholders declared the business 'uninvestible.' The utility is set to run out of cash by next month and risks being plunged into special administration — a state-supervised process akin to insolvency for businesses that provide critical services.
The judge in charge of a restructuring plan for Thames Water is not expected to come up with a formal decision on a £3 billion ($3.7 billion) emergency loan from senior creditors before Feb. 14. Equity investors are hesitant to commit to a rescue bid until that has been decided, according to the people.
Class B debt holders object to the plan, claiming it would effectively allow senior creditors to exert control over the company, and proposed a deal they say is better and cheaper.
The current attempt to attract an investor follows a previous round in December that received a lukewarm response. With hours until the second equity raise process is due to expire, the situation could still change.
Another uncertainty is whether Thames will decide to go to the Competition and Markets Authority until Feb. 18 to challenge industry regulator Ofwat's decision on how much money companies would be allowed to invest and hike bills over the next five-year period.
Both water firms and the government say higher bills are necessary to fund an infrastructure upgrade, following a groundswell of public ire over chronic leaks and sewage spills.
Potential Bidders
Castle Water, a firm backed by William Pears Group that bought Thames' non-household water and sewerage retail business in 2016, is looking to own a majority stake in the utility, Bloomberg previously reported. It's seeking to ultimately list Thames on the stock exchange.
The company made a fully funded offer to inject £4 billion into Thames Water to help turnaround the utility, according to one of the people familiar with the process. William Pears, a financing and real estate company, would help provide some of the funding.
The other confirmed submission was a £5 billion bid from Covalis to inject around £1 billion upfront, before raising another £4 billion from asset sales, refinancing and the listing, another person said.
The bid involves plans to review Thames' business, which may involve selling assets, before listing the remainder on the stock market, the person added. The government would hold a so-called golden share, granting it additional rights including a seat on the board. Covalis is also looking to bring operational partners on board, including France's Suez.
But the rescue bidder has expressed doubts about the feasibility of finding new equity for Thames by April in a letter to the High Court in London, as reported by Bloomberg News on Friday.
Covalis, which has also some exposure to the Class B debt, said in the letter that to progress it would need 'significantly more information and greater engagement with Thames Water management than has been provided to date.'
Neither the chair or chief executive officer of Thames Water attended the most recent meeting for prospective equity investors, Covalis said in the letter.
--With assistance from Lucca de Paoli, Swetha Gopinath and Vinicy Chan.
Trump's Tariffs Make Currency Trading Cool Again After Years of Decline
The Reason Why This Super Bowl Has So Many Conspiracy Theories
Believing in Aliens Derailed This Internet Pioneer's Career. Now He's Facing Prison
Orange Juice Makers Are Desperate for a Comeback
Business Schools Confront Trump Immigration Policies
©2025 Bloomberg L.P.