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Thames Water has obtained preliminary fairness bids from events that embrace one of many US’s greatest infrastructure buyers and a London-based distressed asset investor.
The teetering utility, which serves 16mn households in and round London and is groaning below practically £20bn of debt, mentioned on Tuesday that it had “obtained proposals from six events in respect of the fairness elevate” via which it’s in search of to lift billions of kilos to stave off collapse.
Among the many six events fascinating in offering recent fairness to Thames are US personal fairness agency KKR, Hong Kong infrastructure investor CKI, hedge fund Covalis Capital and Fort Water, a supplier of enterprise water companies in London. These 4 events are most dedicated to the method, in response to a number of folks aware of the matter.
The opposite bidders are Stonepeak, a US infrastructure investor that manages greater than $70bn of belongings, and FitzWalter Capital, a London-based fund that focuses on investing in distressed debt, in response to the folks.
These preliminary bids usually are not binding and don’t require any agency commitments, with among the events selecting to stay within the course of despite the fact that they view an eventual agency bid as unlikely.
“Everyone seems to be simply hanging spherical the ring seeing if something good comes out,” mentioned one particular person near the method.
Two folks aware of the matter mentioned Stonepeak was much less eager about shopping for Thames than KKR and CKI, the latter of which submitted a proposal indicating it could inject £7bn into the near-insolvent utility.
FitzWalter, in the meantime, was the unnamed get together referred to by Thames Water as submitting a proposal “for minority fairness, supposed to associate with buyers, and didn’t set out monetary metrics”.
Stonepeak and FitzWalter declined to remark.
FitzWalter owns a few of Thames Water’s lower-ranking class B bonds, which might maintain heavy losses below the £3bn mortgage deal the utility has agreed with higher-ranking collectors.
Covalis additionally owns a few of these junior bonds. The London-based agency, which focuses on investing in infrastructure-related belongings, has been extremely important of the way in which that Thames Water and its adviser Rothschild & Co have managed the fairness elevate course of.
Thames Water is working perilously low on money and is attempting to hunt approval from bondholders to entry cash from its £3bn rescue mortgage forward of any potential additional authorized problem to the controversial package deal.
The utility has mentioned it hopes to agree phrases of an fairness elevate by the top of June because it seeks to show round its funds.
Other than the six fairness bidders, the utility’s higher-ranking class A bondholders have indicated they’re getting ready a backup creditor bid if the fairness elevate fails. These bondholders embrace US funds comparable to Elliott Administration and Pimco.
Thames Water mentioned on Tuesday that among the bids additionally supplied collectors a possibility to spend money on the utility in alternate for a writedown to the worth of their debt.
Thames Water declined to remark.
