KKR abandoned Thames Water rescue despite No 10 talks with Kravis

The concern elephantine lined up to rescue Thames Water abandoned its connection days aft talks took spot involving 1 of its co-founders and Downing Street officials.

Sky News has learnt that Henry Kravis, 1 of the architects of KKR's ascent to becoming 1 of the world's astir almighty investors, discussed its program to bail retired Britain's biggest h2o institution with Varun Chandra, Sir Keir Starmer's apical concern adviser, implicit the weekend.

Sources adjacent to the now-abandoned deal said the telephone betwixt the brace had been organised pursuing a petition from Thames Water and its advisers astatine Rothschild.

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An insider said the treatment had been "constructive", with Mr Chandra said to person sought to reassure Mr Kravis that the authorities was supportive of the deal.

One root adjacent to KKR said, however, that its elder New York-based executives were incapable to get comfy with the level of operational and fiscal hazard attached to investing arsenic overmuch arsenic £4bn of equity into Thames Water.

They were besides acrophobic astir antagonistic rhetoric directed astatine Thames Water and the remainder of the manufacture successful caller weeks by Steve Reed, the situation secretary, and different ministers, the root added.

KKR's determination to propulsion retired of the discussions leaves the h2o company, which serves much than 15 cardinal customers crossed London and the Thames Valley, relying connected an alternate woody being assembled by its biggest bondholders.

That connection is being progressed, Thames Water said connected Tuesday, though the spectre of impermanent nationalisation continues to loom implicit it.

The institution was fined a grounds £123m by Ofwat, the manufacture regulator, past week, and faces further important penalties successful the coming months.

KKR has been contacted for comment.