Thames Water's preferred bidder, KKR, has stepped back from a £4 million investment deal amid financial struggles for the utility provider. An Independent Water Commission report highlighted the need for major reforms in the water sector, urging improved oversight from Ofwat. With debts of around £19 billion and a critical cash situation, Thames Water has secured a £3 billion loan to avoid nationalisation, while exploring other recapitalisation options. The government is closely monitoring the situation, as the company aims to stabilize before the summer of 2026, according to Sir Adrian Montague, the chairman of Thames Water.
Private equity giant KKR, once poised to rescue Thames Water with a £4 million investment, has now stepped back, describing the situation as "disappointing".
The Independent Water Commission's report indicates that the water sector in England and Wales urgently requires a "fundamental reset" to enhance regulatory oversight.
Thames Water, facing £19 billion in debt and operating with a cash buffer for just five weeks, aims for a sustainable recapitalisation following KKR's withdrawal.
Environment Secretary Steve Reed mentioned that Thames Water is exploring multiple options while the government remains vigilant regarding the financial stability of the utility.
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