As the Morning Star and other British media report, embattled Thames Water has received a “disastrous vulture auction” buyout bid from investment group Covalis Capital that could see the utility giant broken up into smaller businesses. Covalis’s bid involves bringing in French company Suez to help it run Thames Water as it sells off large chunks of the supplier’s assets. The offer involves £1 billion up front, plus another £4 billion from planned asset sales and refinancing.
They include selling individual pieces of infrastructure such as tunnels, then leasing them back, or hiving off entire regions that Thames Water serves, such as the Thames Valley. The new owner would then list what remains of Thames Water on the stock market. But the bid is dependent on Ofwat (the UK state regulator) allowing Thames Water to slow a required programme of investment in upgrading its infrastructure and systems for the next few years, which bidders are thought to view as unachievable. GMB national officer Gary Carter said:
“Any plan to takeover Thames and break it up would be a disaster for consumers and workers. These bids won’t stop the leaks nor pollution — they will only line the pockets of those who want to break it up.
Thames Water needs considered, long-term investment to repair its infrastructure, stop the leaks and provide stability; not the plundering of its assets to make a quick buck.
The government has to stop this vulture auction and take control of Thames in the interest of the public.”
A spokesperson for Suez confirmed that it had entered an “exclusive partnership” with Covalis on the bid. The government would hold a so-called golden share in the company, giving it a seat on the board and other rights.
Both Covalis and Thames Water declined to comment.
