Thames Water: 'Game over' for debt-riddled UK water firm as potential investor KKR drops out - MP calls for firm to be put into administration

The heavily indebted supplier – Britain’s biggest water supplier with 16 million customers – said the investment firm indicated it would not be in a position to proceed with a bid and that its status as preferred bidder had lapsed. Thames Water said it intends to take forward discussions with “certain senior creditors” on an alternative plan to recapitalise the business.

It will also hold talks with regulator Ofwat on the senior creditors’ plan. Sir Adrian Montague, chairman of Thames Water, said: “Whilst today’s news is disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal.

“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.”

KKR was chosen as preferred bidder at the end of March to invest more than £3 billion of new equity into Thames Water to help keep it operating amid fears the supplier was running out of cash. Thames Water said at the time it would also continue talks with senior creditors on a parallel alternative transaction, given there was no certainty over a deal being finalised with KKR.

But the withdrawal of KKR raises the spectre of a temporary government nationalisation once more, should it fail to secure a rescue deal. Thames Water is about £19 billion in debt and MPs were told last month that at one point this year it had about five weeks’ worth of cash left before going bust.

That was before it secured an extra £3 billion loan deal, which effectively stopped it from being renationalised and falling under Government control. However it still needs substantial ongoing financial support to put its finances on a long-term stable footing.

Lib Dem Charlie Maynard, who represents Witney in Oxfordshire, said the government had a "big problem". Speaking to BBC Radio Oxford, Maynard said the government would now be "scrambling to try and fix" the situation.

He renewed his calls from earlier in the year that the company should be put into government-supervised administration. He added: "They should be in bankruptcy, because you can't deal with this enormous amount of debt... you've got to cut it down into something sustainable. The government is just doing anything it can to not do the fundamental thing that will actually fix it."

Meanwhile activist Feargal Sharkey said it is “game over” for the water firm. He posted on X: “That's it. Game over for @Thameswater. Govt needs to put TW into special administration and today!”.