French Suez Group Proposed to Oversee Reorganisation of UK’s Largest Water Provider
Thames Water, struggling under a £19bn debt burden and on the brink of collapse, has received a £5bn proposal from Covalis Capital. The deal would bring in France’s Suez Group to manage a comprehensive restructuring of the company, which serves 16 million customers in London and the Thames Valley.
Covalis intends to inject £1bn upfront and raise an additional £4bn through asset sales, potentially splitting the business and preparing parts for a stock market flotation. The UK government would retain a board seat and a “golden share” to safeguard public interests.
Suez, with extensive water management experience, would act as a technical advisor without acquiring ownership in Thames Water. “In collaboration with Covalis, Suez aims to leverage its expertise to ensure a sustainable recovery for Thames Water,” the company stated.
The bid is contingent on Thames Water securing a £3bn emergency loan to maintain operations into 2024. Other bidders, including CK Infrastructure Holdings, are also preparing offers, with final submissions expected in January following regulatory decisions by Ofwat on water bill increases.
Covalis’s low-profile founders, Zach Mecelis and Peter Murphy, bring decades of investment expertise to this ambitious rescue bid. Their plan envisions stabilising Thames Water while aligning with regulatory frameworks and operational challenges.
