Hong Kong's CKI makes £7bn bid for majority stake in Thames Water - report

(Sharecast News) - Hong Kong's CK Infrastructure has reportedly made a preliminary £7bn bid to take a majority stake in Thames Water, while indicating that it would require the company's bondholders to take significant haircuts. The Financial Times on Friday cited two people familiar with the matter as saying that CKI, which is part of CK Hutchison group, submitted the non-binding offer earlier this month.

While CKI indicated it would be willing to inject £7bn of equity to fix the utility's broken balance sheet, its offer is contingent on bondholders in Thames Water's near-£20bn debt pile agreeing to take significant writedowns, sources told the FT.

It was understood that CK Hutchison's majority stake in Northumbrian Water could also prove a sticking point. The group is not keen to dispose of its 75% stake in the other regional water monopoly, the sources said, which may cause issues with competition regulators.

Thames Water received several non-binding bids earlier this month, including a rival £4bn bid from US private equity firm KKR.

The water utility is looking to raise billions of pounds in equity while negotiating a debt restructuring with its lenders in a bid to avoid insolvency.

Thames Water declined to comment to the FT, while a representative for CKI did not immediately respond to a request for comment.