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Carlyle, the American investment giant, has become the latest global fund to weigh an investment in Thames Water as the stricken utility races to avoid being nationalised.
Sky News has learnt that Carlyle, which has roughly $435bn in assets under management, is at the very preliminary stages of assessing whether an investment in Thames Water Utilities Limited (TWUL) would be viable.
Britain’s biggest water and wastewater company, which has about 16 million customers, is edging towards the brink of collapse after warning in recent days that its financial liquidity is set to expire months earlier than previously anticipated.
It has also seen its credit rating downgraded further into junk territory by two leading rating agencies.
Carlyle is one of a long list of prospective investors approached by Rothschild, the investment bank advising Thames Water’s board, as the utility scrambles to raise more than £3bn in the coming months.
This weekend, people close to the process confirmed that Carlyle had been approached but said it was “too early” to judge whether the firm might participate in a rescue deal through one or more of its funds.
Among the others sounded out by Rothschild are Brookfield, the Canadian investment giant, and Global Infrastructure Partners, which is now owned by BlackRock.
Many investors and industry analysts believe, however, that the Rothschild-led process is destined to fail given the massive financial restructuring which faces Thames Water.
The company has about £16bn in debt, with approximately £10bn of that accounted for by a group of 90 funds which have appointed Jefferies and Akin Gump to represent them.
That syndicate is now preparing its own rescue plan in the coming weeks, which is likely to include an enormous debt-for-equity swap that would wipe out the existing shareholders.
Thames Water’s future remains so shrouded in uncertainty because the industry watchdog, Ofwat, has rejected the company’s initial spending…
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