Octopus Power Group is wading into the battle for the way forward for Britain’s largest water firm as a part of a consortium which incorporates the French infrastructure large Suez.
The take care of Kraken would offer Covalis Capital, the infrastructure investor spearheading the consortium, with essential know-how experience because it seeks to handle one of many UK’s most complicated utilities – and one with a long-standing popularity for poor customer support.
Earlier experiences stated that Covalis would inject about £1bn into Thames Water, with £4bn extra raised from asset gross sales, refinancing and a inventory market itemizing.
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Some business sources have expressed doubts in regards to the feasibility of such a plan.
The emergence of Octopus Power’s involvement within the Thames Water disaster underlines the dimensions of Kraken’s ambitions because it additional extends its attain past the power sector.
Earlier this week, TalkTalk grew to become the primary main broadband supplier to affix the Kraken platform.
Wholly owned by Octopus Power, Kraken now manages greater than 60 million buyer accounts globally, of which roughly 5 million are water firm prospects.
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An Octopus wind turbine. Pic: Octopus
The consortium comprising Covalis, Suez and Octopus Power was amongst fewer than a handful which tabled indicative gives to assist Thames Water increase roughly £3bn in contemporary fairness forward of a deadline on Monday.
CK Infrastructure Holding and Fort Water are additionally understood to have submitted proposals, whereas the non-public fairness behemoth KKR stays however didn’t lodge a suggestion, in accordance with insiders.
This week’s deadline was in any case considered arbitrary and meaningless as a result of two different essential determinants of Thames Water’s future have but to turn into clear.
One is the result of a courtroom battle between the water firm’s class A and sophistication B bondholders, each of which have stated they need to lend an extra £3bn to assist Thames Water survive.
The corporate has backed the category A plan although it’ll saddle Thames Water with increased curiosity funds at a time when its creaking steadiness sheet has left it on the point of non permanent nationalisation.
The second main uncertainty is whether or not Thames Water plans to attraction in opposition to an Ofwat ruling that it will possibly enhance buyer payments by 35% over the following five-year regulatory interval, relatively than the 53% it had requested.
Thames Water should resolve inside days whether or not to formally attraction to the Competitors and Markets Authority.
Potential fairness buyers regard each these occasions as materials to their funding case, with a most popular bidder not anticipated to be chosen by the corporate and its advisers at Rothschild till April.
Thames Water was plunged deeper into disaster final yr when its current shareholders – comprising a mixture of sovereign wealth funds and pension funds – declared the corporate “uninvestible” and reneged on a dedication to supply billions of kilos in new funding.
The federal government has stated it doesn’t regard a particular administration regime (SAR) as a fascinating end result, though an opposed end result from the bondholders’ authorized battle or incapability to safe extra fairness may render the corporate bancrupt.
Laden with £19bn of debt, Thames Water has already warned that it’s going to run out of cash subsequent month.
The one different main instance of a SAR course of was that involving Bulb Power, which collapsed in 2021.
Its 1.5 million-strong buyer base was purchased by Octopus Power, with their accounts transferred onto Kraken inside six months.
Kraken, which works with UK water firms together with Severn Trent and Portsmouth Water, says that it reduces water leakages, and reduces prices for each firms and prospects.
Octopus Power declined to touch upon Tuesday.
