CKI Director Demands Thames Water Open Bidding After Failed Takeover
A director at CK Infrastructure (CKI) has voiced strong frustration over being shut out of the process to rescue Thames Water, the heavily indebted water company. Andrew Hunter, CKI's co-managing director, described the situation as ongoing "forever" and called for regulators to step in and allow other firms to bid, following the collapse of a previous takeover attempt by KKR.
Investors Urge Humility and Competitive Bidding
Hunter argued that Thames Water's management should "eat humble pie" after the failed takeover last year, where KKR withdrew at the last minute. He emphasized the need for a competitive sale process, stating that CKI would bid if given the opportunity. Thames Water has been struggling under £17.6 billion in debt, accumulated since privatization, and is currently negotiating a £10 billion rescue plan with creditors to avoid government administration.
CKI's Experience and Credentials
CKI, owned by Hong Kong billionaire Li Ka-shing, has a proven track record in the UK utilities sector. The company acquired Northumbrian Water in 2011, serving 2.7 million customers, and also owns UK Power Networks and Northern Gas Networks. Hunter highlighted this experience as crucial for managing Thames Water, which serves 16 million customers in and around London. He dismissed concerns about Chinese links, noting CKI's origins under British rule in Hong Kong and its listings in both Hong Kong and London.
Criticism of Current Lenders and Process
Hunter expressed doubts about Thames Water's current lenders, including US hedge funds like Elliott Management and Silver Point Capital, as suitable long-term owners. He described them as a "mixed bag" of traditional creditors and distressed debt funds, lacking experience in running UK water companies. Hunter also criticized the exclusivity granted to KKR, arguing that other bidders should have access to due diligence information to make fair offers.
Regulatory and Government Involvement
While CKI has communicated with the water regulator Ofwat, Hunter confirmed he has not personally spoken with Environment Secretary Emma Reynolds, whose approval would be necessary for any rescue deal. A spokesperson for Thames Water's creditors declined to comment on the matter. The ongoing negotiations aim to address fines for leaks and pollution, preventing temporary nationalization.
Hunter concluded by urging a restart of the bidding process, emphasizing the importance of experienced ownership for Thames Water's future stability and service delivery.
