Major investor quits Thames Water rescue deal as utility circles the drain

• Preferred partner KKR drops out and leaves Thames at risk of collapse  

By MIKE SHEEN

Updated: 09:02 BST, 3 June 2025

Thames Water has been plunged deeper into uncertainty after the embattled utility’s preferred investment partner abandoned a critical rescue deal.

Private equity giant KKR had been selected to take charge of Thames Water, which has previously warned it could run out of cash, with plans to recapitalise the business and keep it in operation with a £3billion liquidity injection.

The debt riddled water group told investors on Tuesday KKR no longer wished to proceed, once again leaving Thames Water at risk of collapse and nationalisation.

Britain’s biggest water group, which supplies more than 16 million customers, said it intends to progress discussions with industry regulator Ofwat and other stakeholders on plans designed by senior creditors.

Chair Adrian Montague described KKR’s decision as ‘disappointing’ but said Thames Water continues to believe ‘a sustainable recapitalisation of the company is in the best interests of all stakeholders’.

He added: ‘The company will therefore progress discussions on the senior creditors’ plan with Ofwat and other stakeholders. The board would like to thank the senior creditors for their continuing support.’

Thames Water became the central target of public outcry over sewage and pollution in the sector

Before KKR’s selection as preferred partner, rival suitors included Hong Kong’s CKI Infrastructure, UK-based Castle Water and a group of investors led by investment service Covalis.

Thames Water became the central target of public outcry over sewage and pollution in the sector, while firms also faced criticism over poor upkeep of infrastructure and bumper shareholder payouts.

The group kept the threat of nationalisation at bay in late March after judges dismissed an appeal against the company’s £3billion emergency bailout package.

It comes as households around the country face double-digit bill increases in the coming years after a controversial funding package was approved by regulators.

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An overhaul of the way the industry is regulated was proposed by a government-commissioned review in its interim report published on Tuesday.

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Major investor quits Thames Water rescue deal as utility circles the drain

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