US private equity firm KKR drops bid to buy troubled British utility Thames Water

2 days ago 3

British inferior Thames Water says a U.S. concern steadfast has dropped a rescue bid for the debt-burdened company

LONDON -- British h2o and sewage inferior Thames Water said Tuesday that a U.S. concern steadfast has dropped a rescue bid for the debt-burdened company.

Thames Water said backstage equity institution KKR decided not to marque a bid and its presumption arsenic preferred bidder had lapsed. The inferior said it is talking to “senior creditors” astir an alternate money-raising plan.

“Whilst today’s quality is disappointing, we proceed to judge that a sustainable recapitalization of the institution is successful the champion interests of each stakeholders and proceed to enactment with our creditors and stakeholders to execute that goal,” Thames Water president Arian Montague said.

The cash-strapped company, which provides h2o and sewage services to 16 cardinal radical successful and astir London, has teetered connected the borderline of insolvency nether astir 19 cardinal pounds ($26 billion) successful debt. The inferior received tribunal support successful March for 3 cardinal pounds successful emergency funding to support it from falling into authorities administration.

KKR’s withdrawal makes it much apt the British authorities volition person to nationalize the company, astatine slightest temporarily.

Environment Secretary Steve Reed said the authorities was “monitoring the situation,” but “Thames (Water) itself remains stable.”

Thames Water is the absorption of nationwide choler implicit sewage spills that person fouled lakes, rivers and beaches astatine a clip erstwhile h2o and sewage companies are hiking bills to modernize aging systems and header with the demands of clime alteration and colonisation growth.

Last week the institution was fined astir 123 cardinal pounds ($166 million) for releasing sewage into rivers and streams portion paying dividends to its shareholders.

Consumers and politicians person criticized the company, arguing Thames Water created its ain problems by paying overly generous dividends to investors and precocious salaries to executives portion failing to put successful pipelines, pumps and reservoirs.

Company executives accidental the responsibility lies with regulators, which kept bills excessively debased for excessively long, starving the institution of captious currency to money improvements.