CK Infrastructure Holdings (CKI), the Hong Kong-based investor behind Northumbrian Water, has re-entered the race for Thames Water following KKR’s recent withdrawal, reigniting the auction for control of the UK’s largest water utility.

CKI submitted a letter to Thames Water chairman Sir Adrian Montague on Monday, requesting access to due diligence materials and indicating its readiness to deliver a formal takeover bid within six weeks. The private infrastructure giant had previously been eliminated from the process despite tabling a multibillion-pound proposal.

The move follows the collapse of KKR’s preferred bidder status after talks with government officials raised concerns over political risk. With Thames Water now at risk of nationalisation, the company’s largest group of creditors has responded with a £17bn recapitalisation proposal that includes £3bn in new equity and over £2bn in debt funding. The plan would erase existing shareholders and include significant debt writedowns.

While bondholders have proposed installing business veteran Mike McTighe to lead their effort, concerns persist over their lack of operational experience. “This is a proven operator versus a group of financial engineers,” a source close to CKI told Sky News.

CKI controls extensive UK infrastructure, including Northern Gas Networks, UK Power Networks, and Eversholt Rail. Its ability to operate assets at scale is seen as reassuring to ministers concerned about taxpayer liabilities under a potential special administration regime.

Still, a CKI-led takeover faces political headwinds. Cross-party MPs have raised concerns over the group’s links to Beijing. Former Conservative leader Iain Duncan Smith said on social media that a CKI acquisition “should be avoided at all costs.”

Thames Water has until late July to secure a viable rescue package before regulators escalate oversight. The UK government maintains that the company remains “stable” but stands ready to intervene if necessary.

Source: Sky News

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