Thames Water Utilities Limited (TWUL), the UK’s largest water supplier, has selected U.S. investment firm KKR as its preferred partner in Phase 2 diligence stage of its equity raise process, marking a significant step forward in its efforts to stabilize its finances and avert a deeper crisis.
The company’s announcement follows a detailed review of six proposals received in respect of the equity raise process launched in the summer of 2024. This comes as part of Thames Water’s broader plan to recapitalise its operations, address its £19 billion debt burden, and avoid the threat of insolvency.
KKR’s proposal includes financial metrics pointing to a material impairment of the company’s Class A debt; while discussions continue over the proposal’s finer details, Thames Water emphasized that there is no guarantee a binding agreement will materialize, with the outcome still dependent on due diligence, documentation, and regulatory approval. As a result, some senior creditors are also working on alternative transaction structures to seek to recapitalise the business.
This development follows the company’s February 2025 success in securing High Court approval for a £3 billion restructuring plan aimed at extending liquidity and enabling a longer-term recovery. The plan survived legal challenges from environmental campaigners and some creditors, with the Appeal Court upholding the decision earlier in March.
Among the proposals previously considered were bids from Covalis Capital and Castle Water. Covalis, in partnership with France's Suez, proposed a major restructuring involving asset sales and a future public listing. Meanwhile, Castle Water and KKR both offered majority stakes without selling off assets, with plans to list the company on the stock market.
Thames Water remains committed to securing a market-led solution that ensures long-term stability while minimizing the burden on customers and taxpayers. The company aims to agree on final transaction terms by Q2 2025 and complete the recapitalisation in the second half of the year. The outcome will be pivotal not only for the utility’s 16 million customers but also for the future of water sector regulation and ownership in the UK.
