Thames Water said US private equity giant KKR has pulled out of plans to invest in the utility and it is now progressing talks with senior creditors for an alternative to stabilise its finances.
The heavily indebted supplier – which chose KKR as its preferred bidder at the end of March – said the investment firm indicated it would not be in a position to proceed with a bid and that its preferred partner status had lapsed.
Thames Water said it intends to take forward discussions with “certain senior creditors” on an alternative plan to recapitalise the business.
It will also hold talks with regulator Ofwat on the senior creditors’ plan, alongside other stakeholders.
Sir Adrian Montague, chairman of Thames Water, said: “Whilst today’s news is disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal.
“The company will therefore progress discussions on the senior creditors’ plan with Ofwat and other stakeholders.
“The board would like to thank the senior creditors for their continuing support.”
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