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Embattled Thames Water could be split up through a planned takeover by investment firm Covalis and French utilities group Suez.
Britain’s biggest water supplier is struggling to get a multi-billion pound emergency cash injection to avoid a taxpayer bailout.
Potential bidders for the indebted utility also include Hong Kong-based CK Infrastructure Holdings, which owns Northumbrian Water.
And Castle Water, a company co-owned by Conservative Party treasurer and property magnate Graham Edwards, has proposed pumping around £4bn into Thames Water in return for a majority stake, with a plan to list on the stock market within three years.
Embattled: Thames Water is fighting for a multi-billion pound emergency cash injection to avoid a taxpayer bailout
The offer from Covalis, a London-based utilities investment firm, involves a £1bn upfront payment, plus a further £4bn from planned asset sales and refinancing. That could include selling individual pieces of infrastructure, such as tunnels, and then leasing them back.
But they could also involve breaking up entire regions served by Thames Water, such as the Thames Valley.
Suez, which runs major water services in France, would act as an advisor and would not own shares in Thames Water. The Government would have the so-called golden share, which would grant it a seat on the board of directors.
The offer is dependent on regulator Ofwat allowing the company to slow down its infrastructure investment programme.
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