Thames Water Selects KKR for Equity Financing, Aims to Reduce Debt by 2025

Thames Water, a prominent private utility company responsible for water supply and wastewater treatment in Greater London and surrounding areas of England, has announced that it has selected American private equity firm KKR as its preferred partner for the next stage of its equity financing process. This decision follows a comprehensive evaluation of various proposals received, with the company viewing this move as a significant step towards achieving a sustainable capital restructuring.

The agreed terms of the transaction aim to be finalized by the second quarter of 2025, with the goal of completing the capital restructuring by the end of 2025. The proposal from KKR includes substantial financial metrics, indicating a major reduction in A-class debt. However, discussions on other aspects of the proposal are still ongoing.

Thames Water emphasized that it cannot guarantee the receipt of a binding equity proposal, as this is contingent upon due diligence and regulatory approvals. Last month, it was reported that KKR had offered approximately 50 billion dollars to take over the struggling company through a management buyout.

Thames Water, the largest water utility service provider in the UK, initiated a financing process last summer. The company cited increasing debt and difficulties in raising funds as reasons for its claim of being "not investment-grade." This development marks a critical juncture for Thames Water, as it seeks to stabilize its financial position and ensure the continuity of its essential services.