Hong Kong’s richest man mulls Thames Water investment

Li Ka-shing considers granting lifeline to troubled utilities company

Hong Kong’s richest man is exploring plans to invest in Thames Water, as the troubled supplier seeks to raise billions of pounds to survive.
Li Ka-shing, who already owns a 75pc stake in Northumbrian Water, is mulling an investment package that would grant Thames Water an additional lifeline to stave off nationalisation.
It is understood Li Ka-shing’s CK Hutchison has been approached by bankers as part of Thames’s efforts to raise at least £3bn in new investment to stay afloat.
CK is unlikely to make a final investment decision until regulator Ofwat reveals how much Thames Water can raise household bills by in its final determination later this year.
However, any proposed investment would significantly strengthen Thames Water’s balance sheet, while also expanding the Hong Kong tycoon’s sprawling network of assets in the UK.
As well as a majority stake in Northumbrian Water, CK Group also owns a stake in Northern Gas Networks and a portfolio of 32 onshore wind farms. It also owns the retailer Superdrug and mobile network Three.
It comes just days after bosses of Thames Water announced an emergency £3bn cash injection from a group of creditors.
Thames said in an update last Friday that the proposed financing would allow it to stave off collapse up until at least October 2025, having previously warned it could run out of cash by December this year.
The proposed deal will include an initial £1.5bn payment from senior creditors, with the capacity for a further £1.5bn split across two tranches.
However, Chris Weston, chief executive of Thames, stressed that the investment from creditors would not derail its separate equity-raising process, which is being led by bankers at Rothschild.
He said last week: “The liquidity extension acts like a bridge that enables us to carry on discussing with both potential providers of equity and also our creditors about what Thames’s balance sheet should look like.”
It is understood that the fundraising process has also drawn interest from investment giants Brookfield Infrastructure Partners and Global Infrastructure Partners, as well as Carlyle, the US private equity house, and Castle Water, a supplier backed by the billionaire Pears’ property dynasty.
Industry sources said that private equity firm I Squared Capital had also been approached.
However, Northumbrian, which is not seeking a full takeover bid of Thames, could emerge as a potential frontrunner.
Any investment would serve as a relief for Sir Keir Starmer, who has so far resisted attempts to nationalise Thames Water, which remains burdened by a £16bn debt pile.
The company has been seeking new backers ever since it was abandoned by a consortium of shareholders in April.
At the time, the cast of deep-pocketed investors claimed tough regulatory conditions had rendered the utility company’s business plan “uninvestable”.
CK Infrastructure declined to comment.