LONDON — British water and sewage utility Thames Water said Tuesday that a U.S. investment firm has dropped a rescue bid for the debt-burdened company.
Thames Water said private equity company KKR decided not to make a bid and its status as preferred bidder had lapsed. The utility said it is talking to ''senior creditors'' about an alternative money-raising plan.
''Whilst today's news is disappointing, we continue to believe that a sustainable recapitalization of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal,'' Thames Water chairman Arian Montague said.
The cash-strapped company, which provides water and sewage services to 16 million people in and around London, has teetered on the edge of insolvency under about 19 billion pounds ($26 billion) in debt. Thames Water received court approval in March for 3 billion pounds in emergency funding to keep it from falling into government administration.
KKR's withdrawal makes it more likely the British government will have to nationalize the company, at least temporarily.
Environment Secretary Steve Reed said the government was ''monitoring the situation,'' but ''Thames (Water) itself remains stable.''
He told lawmakers in the House of Commons that ''nationalization is not the answer," noting that it ''would cost over 100 billion pounds of public money that would have had to be taken away from other public services.''
Thames Water is the focus of nationwide anger over sewage spills that have fouled lakes, rivers and beaches at a time when water and sewage companies are hiking bills to modernize aging systems and cope with the demands of climate change and population growth.
