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Near bankruptcy Thames Water Paid £20mn to cover the relevant costs of KKR’s failure to abort the attempt to save the UK’s largest water utility.
Thames Water Chosen Kkr, the Private Equity Giant, as the preferred bidder for an emergency rescue earlier this year. Thames water is obliged to pay for the cost of potential buyers in the analysis and research of state of utility infrastructureoperations and finances under the terms of the agreement. The cost of that exercise was primarily £20mn, according to people familiar with the situation, largely due to fees paid to KKR’s advisers.
Kkr took the deal in June, quoted The Danger of Government Intervention. It passes due diligence to lenders who are now trying to win approval from regulators for their own takeover of Thames Services, which provides water services and customers. Any deal would also have to be approved by London’s high court.
The bills will raise concerns that cash will be drained from the utility, which receives all of its revenue from customers’ water bills. Thames Water is struggling under the weight of £20bn of debt and is trying to avoid the temporary regime of Pensiony – a sovereign pension of the government and writing off their investment and going out of business by 2024.
The measure of the due diligence effort, which includes visits to the water site and the suffering of the treatment facilities, with documents that failed in the previous year that the utility failed in the map in one year Third in its SEAGE network.
The reports produced by KKR and the creditors highlight the dangers of the so-called “a point of failure risk“In some of the largest water sites in the Thames, according to people familiar with the objects and documents seen in the financial period.
Coppermills water treatment works and Thebecton Swage treatment works in East London were identified as the two facilities at highest risk of outages, according to this analysis.
The cost of the due diligence work added up to a multimillion pound bonanza pay For advisors, bankers and lawyers looking to get a handle on the financial future of a troubled company. The total advisory bill could be as much as £200, A settlement of the debt was agreed, the high court heard earlier this year; The costs that the utility itself covers are on its own cash-strapped balance sheet.
KKR’s advisers on the abandoned bid included Investment partners PJT Kirkland and Ellis and Management Consultant Roland Berger.
KKR ended up bailing out Thames Water, the private equity firm covering due diligence costs, according to a person familiar with the situation.
Senior creditors – which include US Pirmett Firms Management Management and Apollo Global Management – submitted their latest rescue proposal To the Regulator Earlier This Month, Pledging £3.15bn in Equity and a 25 per cent scited of the nominal value of their exposure.
They also asked for concessions on regulatory fines and targets. The lenders said they have “an ambition” to reduce Swagage outflows by 30 percent by 2030, well below the government’s target of 50 percent.
Rival Potential Buyers incl Ck infrastructure, The Northumbrian water owner, recently wrote to OFWAT claiming they were “excluded” from the bidding process meaning it was unable to get the best deal for customers. CKI explained it would take for Thames water if the government put it in its share.
The creditors said their plan “will see £20.5bn invested over the next five years and is the fastest and most reliable route to turn around Thames Water, deliver on customer priorities, clean up waterways and rebuild public trust.”
Kkr declined to comment on the appropriate costs of its shortage.
Thames Water said: “Advisor fees are part of a broad, complex return to customers targeting customers to customers improving customers to customers to repairing customers and repairing customers to customers to repairing customers to repairing customers customer.