Thames Water has announced that it has selected US private equity group KKR to enter the Phase 2 diligence stage of the equity process as preferred partner.
Agreed transaction terms are targeted for the second quarter of 2025 with a view to completing a recapitalisation in the second half of 2025.
KKR is a leading global investment firm listed on the New York Stock Exchange, and already owns 25% of Northumbrian Water. The US firm had submitted a preliminary £4bn bid earlier this year, which would give it a majority stake.
KKR’s proposal includes financial metrics which indicate a material impairment of the Class A debt and discussions continue in relation to other aspects of the proposal.
There is no certainty that a binding equity proposal will be forthcoming as it remains subject to diligence, documentation and regulatory and other approvals. As a result, Thames has said that certain senior creditors continue to progress in parallel alternative transaction structures to seek to recapitalise the business.
