Thames Water: Debt-riddled UK water firm selects KKR as 'preferred' bidder - after chief finance officer quits

The company said it expects to finalise the terms of the deal by the second quarter of 2025, with the capital raised expected to be completed in the last six months of the year. The firm said it had selected KKR as a preferred partner following a “detailed assessment of proposals received”.

It added it remained focused on “putting Thames Water on a more stable financial foundation, implementing its turnaround plan and delivering a market led solution that is in the best interests of customers, UK tax payers and the wider economy”. KKR’s proposal bid included aiding the firm in the reduction of its Class A debt.

The company said further details of the proposal were still in discussion. It added there was still no guarantee a binding agreement would be reached, with proposals still subject to further diligence, documentation and other regulatory measures.

As a result, the firm said certain senior creditors would continue to progress in exploring other options to recapitalise the business, despite KKR being named as the preferred partner. Thames Water has faced a major financial crisis of a more than £16bn debt pile, with nationalisation appearing imminent without further equity investment.

The company received the High Court’s approval for a £3bn lifeline from its top-tier creditors in February. But, even with the loan the company said it would rush out of cash at some point within the next year.

A further blow was made to the firm after its chief financial officer Alastair Cochran told the firm that he was stepping down. Mr Cochran, who was at Thames Water for three-and-a-half years, was “instrumental” in securing a £3bn deal, according to chief executive Chris Weston.

A source with knowledge of the situation said Mr Cochran notified the company of his departure early on Friday (28 March). He will remain in post until the end of March.

Stuart Thom, Thames’ current director of group finance, will be interim chief financial officer. Chief Executive Chris Weston said: “Since joining Thames Water in September 2021, Al has overseen significant progress within the company.

“He has led on the development of our most ambitious business plan ever, alongside work to put the business on a sound financial footing for the future, enabling us to better deliver for customers and the environment. Al was instrumental in securing £3bn of new liquidity to support the business through its longer term equity raise process. His technical capability, relationships with stakeholders and interest groups and personal tenacity and resilience has been pivotal to the Company delivering one of the largest restructuring activities in UK corporate history.”