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Hong Kong’s CK Infrastructure has made a preliminary £7bn bid to take a majority stake in Thames Water, while indicating that it would require the troubled utility’s bondholders to take significant haircuts.
CKI, part of CK Hutchison group, submitted the non-binding offer to take over Thames Water earlier this month, according to two people familiar with the matter.
While CKI indicated it would be willing to inject £7bn of equity to fix the utility’s broken balance sheet, its interest is contingent on bondholders in Thames Water’s near-£20bn debt pile agreeing to take significant writedowns, the people added.
CK Hutchison’s majority stake in Northumbrian Water could also prove a sticking point. The group is not keen to dispose of its 75 per cent stake in the other regional water monopoly, the people said, which may cause issues with competition regulators.Â
Thames Water received several non-binding bids earlier this month, including a rival £4bn bid from US private equity firm KKR. The UK’s largest water utility is looking to raise billions of pounds in equity while negotiating a debt restructuring with its lenders in a bid to avoid insolvency.
Thames Water declined to comment. A representative for CKI did not immediately respond to a request for comment.
This is a developing story