Hong Kong infrastructure company CKI is reportedly a leading contender to acquire Thames Water if the heavily indebted utility collapses, according to The Times. CKI, which operates UK Power Networks, is among those preparing bids should Thames enter a special administration regime (SAR).
CKI has indicated it would accept tougher penalties for environmental breaches than Thames's class A creditors, who have submitted their own purchase bid. The creditor group argues the company cannot afford expected £1bn in fines for violations such as illegal sewage dumping, after Thames was hit with a record £104m penalty in May.
Environment Secretary Steve Reed has intensified preparations for a possible SAR, effectively temporary nationalisation. The government confirmed it appointed FTI Consulting to make contingency plans, though a court would ultimately approve any administration. Campaigners, including River Action, urged Reed not to sell Thames immediately after an SAR but to consider nationalisation for public benefit.
Thames Water supplies 16 million customers in London and the South East and has £17.7bn net debt. CKI previously expressed interest after preferred bidder KKR pulled out earlier this summer. However, some MPs have raised concerns about CKI's links to Beijing, and former Conservative leader Iain Duncan Smith said a CKI acquisition 'should be avoided at all costs.'
A Thames Water spokesperson said: 'Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution... Constructive discussions with our many stakeholders continue.'
