KKR, one of the world’s biggest private equity investors, is advancing plans to play a crucial role in a rescue of Britain’s biggest water supplier.
Sky News has learnt that KKR, which manages assets of more than $600bn, has hired investment bankers and lawyers to help formulate a plan to inject billions of pounds of equity into the company, which has more than 15m customers.
PJT Partners has been engaged to act for KKR on its interest in Thames Water ahead of a deadline for proposals for an equity raise later this month, according to insiders.
The appointment of PJT implies that KKR is seriously interested in aiding a rescue of Thames Water, which is drowning under £19bn of debt and faces the prospect of temporary nationalisation amid a bitter legal fight among rival creditor groups.
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A hearing at the High Court beginning on Monday pits one syndicate of lenders – which want to extend up to £3bn of financing to the company – against another group, which has submitted an alternative plan that it insists is cheaper.
Without the new financing, Thames Water could be forced into an insolvency process known as special administration, which has been used in the UK before in the case of the domestic energy supplier Bulb.
Special administration would probably cost the government billions of pounds while a break-up of Thames Water is finalised or a buyer is found, and Sir Keir Starmer’s administration has said it wants to avoid such an outcome.
However, political pressure is mounting from critics of the company who argue that it should not be allowed to add to its debt burden.
Charlie Maynard, the Liberal Democrat MP for Witney and a long-standing campaigner for an overhaul of water company regulation has submitted a witness statement to the court, urging it to reject a restructuring plan which has secured the endorsement of Thames Water’s board.
“Successive governments have watched on as Thames Water…
