(Bloomberg) -- Thames Water has approached North American infrastructure giants Brookfield Infrastructure Partners, Global Infrastructure Partners as well as Stonepeak to participate in a £3.3 billion ($4.3 billion) emergency fundraising to rescue the UK’s largest water and sewage provider, The Times reported.
The company, advised by Rothschild, is aiming to assemble potential investors for the equity raise by early November, according to the report. Thames Water, Brookfield and GIP didn’t comment to the newspaper.
Thames Water, which serves about a quarter of the UK population, desperately needs to find £3.3 billion in equity before it runs out of money at the end of May 2025. Bloomberg previously reported that a group of creditors holding around £10 billion of the firm’s debt is drawing up its own plan to address the firm’s need for new funds and its unsustainable debt pile.
Rescue efforts could be complicated as Ofwat will not rule until December on how much Thames Water is allowed to increase its bills by. In July, the regulator had suggested that Thames could raise bills by 23% over the period, less than the increase the company had asked for.
A potential outcome for the heavily indebted utility is that the equity injection happens alongside the creditors’ rescue plans, according to the Times.
The funds being approached are large private infrastructure investors. Toronto-based Brookfield manages assets of $191 billion, while New-York headquartered GIP and Stonepeak’s AUMs reach $115 billion and $71.2 billion, according to their websites. GIP was bought by Blackrock earlier this year.
Thames investors want to avoid nationalization because a prolonged period under government control could mean they recover less of the money they lent. While some MPs from the recently elected Labour Party have argued the case for bringing water companies into public ownership, business and trade secretary Jonathan Reynolds has said he wants to see the issue resolved without government involvement.
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