Castle Water to offer £4 billion equity to rescue Thames Water

CASTLE Water will offer to inject £4 billion (S$6.82 billion) into Thames Water this week to help save the beleaguered utility from administration, according to a person familiar with the matter.

Thames, the UK’s biggest water and sewage company, has asked potential investors to submit indicative, non-binding bids by Dec 5.

Castle Water, which bought Thames’ non-household water and sewerage retail business in 2016, is seeking to own a majority stake in the company, according to the person who asked not to be identified speaking about confidential matters.

Thames only has enough money to last until early next year. It’s desperately seeking investors to inject at least £3.3 billion in equity over the next five years to curb chronic leaks and sewage spills, while tackling climate change and a growing population.

The company, which serves the London area, extended the deadline for bids last month, after asking potential investors to provide further details on how they would support its turnaround plan. Castle is seeking to ultimately list Thames on the stock exchange, the person said.

Castle is backed by The William Pears Group, a financing and real estate company that would provide funding, according to the person.

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Other potential bidders that have been widely reported include CK Infrastructure Holdings and KKR & Co, who together own stakes in Northumbrian Water. Thames and its adviser, Rothschild & Co, have also approached Brookfield Asset Management and Carlyle Group, according to other people familiar with the process. BLOOMBERG