Li Ka-Shing: Hong Kong’s Wealthiest Businessman Considers Strategic Investment in Thames Water Amid Financial Struggles

Li Ka-Shing, Hong Kong’s wealthiest businessman, is reportedly considering a significant investment in Thames Water as the embattled utility company works to secure billions to prevent nationalization. Already holding a 75% stake in Northumbrian Water, Li is said to be evaluating a package that could provide Thames Water with a crucial boost to maintain operations.

Li’s company, CK Hutchison, has been approached by bankers as part of Thames Water’s efforts to raise at least $3.9 billion in fresh funding to avert financial collapse. However, sources indicate that CK Hutchison may delay any final decision until the water regulator, Ofwat, issues its ruling on potential increases to household water bills later this year.

A proposed deal would not only reinforce Thames Water’s financial standing but also further expand Li’s substantial portfolio of UK assets. Beyond Northumbrian Water, CK Group’s holdings include Northern Gas Networks, 32 onshore wind farms, the retailer Superdrug, and mobile network provider Three.

This potential investment comes shortly after Thames Water announced a $3.9 billion emergency funding arrangement with a consortium of creditors. Thames Water’s latest update indicated that the financing would likely enable it to operate until at least October 2025, having previously warned that cash reserves could be exhausted by December 2023. The proposed arrangement reportedly includes an initial $1.9 billion injection from senior creditors, with an option for a further $1.9 billion to be disbursed in two additional installments.

Thames Water’s CEO, Chris Weston, clarified that the recent creditor funding would not interfere with the company’s ongoing equity-raising initiative led by Rothschild. Weston remarked that the liquidity extension would effectively provide Thames Water with the time needed to finalize discussions with both potential equity investors and creditors to determine a stable future for its balance sheet.

The fundraising efforts have attracted interest from several major investment entities, including Brookfield Infrastructure Partners, Global Infrastructure Partners, Carlyle Group, and Castle Water, which is backed by the Pears family’s property empire. Industry insiders report that private equity firm I Squared Capital has also been contacted, though Northumbrian Water may emerge as a leading candidate if it decides to proceed with an investment, even if a complete takeover bid for the Thames is not under consideration.

Any successful investment would likely be well-received by UK opposition leader Sir Keir Starmer, who has so far resisted calls for nationalizing Thames Water despite the company’s $20.8 billion debt load. Thames Water has been actively seeking new investors since a consortium of shareholders withdrew in April, citing stringent regulatory requirements that, in their view, rendered Thames Water’s business plan unsustainable.

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