The private equity firm that had been the frontrunner to lead a rescue of the UK’s largest water provider – Thames Water – has pulled out.
Thames Water Utilities, which is staring down the prospect of a special administration process without fresh investment, said an alternative plan was now under discussion after KKR’s exit from the process.
It is understood that the company hopes a new transaction could be agreed by July.
KKR was handed preferred bidder status back in March as Thames, which serves 15 million customers but has a £22.8bn debt pile, moved to secure fresh equity.
Thames said that KKR had indicated it was not in a position to proceed. No reasons are understood to have been given.
But its withdrawal was announced a week after Thames was handed a record fine by the industry regulator for failures related to its wastewater operations and dividend payouts.
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2:35
Thames Water hit with huge fine
The move was also divulged shortly after an interim report for the government raised the prospect of a super regulator being created to bolster and streamline oversight of the water industry.
Thames said it was now progressing talks with senior creditors for an alternative to stabilise its finances, and was also planning discussions with the regulator Ofwat on that plan.
The watchdog is understood to be studying a 400-page document which includes proposals for new equity and debt facilities.
It is hoped that a transaction could be completed by next month.
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The company’s chairman, Sir Adrian Montague, said: “Whilst today’s news is disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal.
“The company will therefore progress discussions on the senior creditors’ plan with Ofwat and other stakeholders.
“The board would like to thank the senior creditors for their continuing support.”
Cash-strapped Thames secured a £3bn lifeline to tide it over back in March as the company moved to secure fresh investment to guarantee its long-term survival.
It had kept open the prospect of an alternative solution, given there was no certainty over a KKR deal being agreed.
A failure to find new investment again raises the prospect of Thames falling into a special administration process.
That would effectively see the company come under temporary government ownership to maintain vital services until a new owner, or ownership solution, is found.
A spokesperson for the industry lobby group Water UK responded: “Everyone agrees that the water industry is not working. We hope this report will be a starting point for the fundamental reforms the sector needs. We need a less complicated system which allows investment to get quickly to where it needs to go.
“In the meantime, companies are focused on investing a record £104bn over the next 5-years to secure our water supplies, end sewage entering our rivers and seas and support economic growth.”
Chair of the environment committee of MPs, Alistair Carmichael, said: “In our evidence session with Thames Water bosses in May we raised serious concerns that Thames had only pursued one bidder at an early stage for its takeover bid, against the wishes of Ofwat, and highlighted the risks this could pose if KKR chose not to proceed. Unfortunately, our concerns have been realised, putting Thames in a perilous position.
“The Government has shied away from acknowledging the potential impact of this scenario on the public finances and must ensure that any takeover is in the public interest and does not line the pockets of financial institutions further to the detriment of customers and operational performance.”
Donald Trump has landed in Scotland ahead of a four-day trip, which includes high-level meetings, praising Sir Keir Starmer as “a good man” but also calling illegal migration a “horrible invasion” that was “killing Europe”.
Mr Trump told reporters: “I like your prime minister. He’s slightly more liberal than I am… but he’s a good man… he got a trade deal done. It’s a good deal for the UK.”
The pair are expected to discuss potential changes to the UK-US trade deal which came into force last month.
Trump left Air Force One to head to Turnberry, one of his Scottish golf courses. Part of the trip will include the opening of another course in Aberdeenshire, billed as “the greatest 36 holes in golf”.
Image: Trump supporters waved as Air Force One landed. Pic: PA
“There’s no place like Turnberry. It’s the best, probably the best course in the world. And I would say Aberdeen is right up there,” the US president said.
“Sean Connery helped get me the [planning] permits. If it weren’t for Sean Connery, we wouldn’t have those great courses,” he added.
During the trip, President Trump will also hold discussions with Scotland’s First Minister John Swinney and EU Commission President Ursula von der Leyen, who is keen to secure a trade deal with the US.
Image: Donald Trump spoke to reporters after landing at Prestwick Airport, Ayrshire. Pic: AP
Mr Trump told reporters there was “a good 50-50 chance” of an agreement with the EU but added there were “maybe 20 different” sticking points.
EU diplomats say a deal could result in a broad 15% tariff on EU goods and half of the 30% Trump is threatening to impose by 1 August.
Image: He travelled to Turnberry, one of his Scottish golf resorts, amid tight security. Pic: Reuters
The US president touched on illegal immigration and gave European leaders a stark warning.
“You better get your act together or you’re not going to have Europe anymore. You got to get your act together,” he said.
“But you’re allowing it to happen to your countries and you got to stop this horrible invasion that’s happening to Europe. Immigration is killing Europe,” he told reporters.
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1:30
What do Scots think of Trump visit?
He was also scathing about the installation of wind turbines across Europe.
“Stop the windmills. You’re ruining your countries,” he said. “It’s so sad. You fly over and you see these windmills all over the place, ruining your beautiful fields and valleys and killing your birds.”
Domestically, President Trump faces the biggest political crisis of his second term in office over his administration’s handling of files linked to disgraced financier and sex offender Jeffrey Epstein, who died in prison in 2019.
He faced another round of questions after stepping off Air Force One. “You’re making a big thing over something that’s not a big thing. I’m focused on making deals, not on conspiracy theories that you are,” he said.
Mr Trump added that “now’s not the time” to discuss a pardon for Ghislaine Maxwell, Epstein’s imprisoned accomplice.
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While the president’s visit did attract some enthusiastic flag-waving supporters at Prestwick Airport, he is also likely to trigger a number of protests, prompting Police Scotland to call in support from other forces in the UK.
The Stop Trump Scotland group has planned demonstrations on Saturday in Edinburgh, Aberdeen and Dumfries.
About 70% of Scots have an unfavourable opinion of Trump, while 18% have a positive opinion, an Ipsos poll in March found.
President Trump is staying at his Turnberry property on Scotland’s west coast this weekend, before travelling to Aberdeenshire on Monday, where he will open a second 18-hole course.
He is due to return to the UK in September for a state visit hosted by the King – the first world leader in modern times to undertake two UK state visits.
A woman who thought she was being injected with Botox was left unable to swallow and doctors thought she had suffered a stroke – after she contracted a life-threatening illness from a potentially illegal product.
Nicola Fairley is one of dozens of people who have developed botulism linked to unlicenced anti-wrinkle injections.
She had the procedure done with her regular beautician after winning a Facebook competition for three areas of “Botox”.
Image: Nicola Fairley
“Within two or three hours my forehead and the sides of my eyes had started to freeze,” Nicola says.
“At first I thought ‘amazing’, that’s what I wanted – then it just carried on.”
Nicola was eventually sent to A&E in Durham, where she met several other patients who all had similar symptoms.
Doctors were stumped. “They thought I’d had a stroke,” she says.
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“We all had problems with our eyes, some of us with our breathing. I couldn’t swallow – they put me on nil by mouth because they were worried I would choke in the waiting room.”
Image: Doctors were worried Nicola could choke after she was injected with a suspected illegal product
It turns out all of the patients had recently had anti-wrinkle injections containing botulinum toxin.
Health officials believe they were imported, illegal products.
Botulism – the disease they caused – is so rare many doctors never see it in their entire careers.
It can cause symptoms including slurred speech and breathing problems, and can be deadly.
The disease is so unusual, and so many cases were coming in, that doctors exhausted their stocks of anti-toxin and had to ask hospitals as far away as London to get more.
The UK Health Security Agency has so far confirmed 38 cases of botulism linked to cosmetic toxin injections, but Sky News has been told of several more.
The outbreak began in the North East but cases have now been seen in the East of England and East Midlands as well.
There are only a handful of legal botulinum toxin products in the UK – of which Botox is one.
But cosmetic treatments are largely unregulated, with anyone allowed to inject products like fillers and toxins without any medical training.
Cheap, illegal products imported from overseas are easily available.
Image: Dr Steven Land
‘It’s the Wild West’
Dr Steven Land runs Novellus Aesthetics clinic in Newcastle upon Tyne. He worked for decades as an emergency medicine doctor before moving into aesthetics.
He says he has been warning health officials of an outbreak for years.
“It’s the Wild West,” Dr Land told Sky News.
“Because anyone can do this, there is a lack of knowledge around what is legal, what’s not legal, what is okay to be injected.
“These illegal toxins could have 50 units, 5,000 units or rat poison – there could be anything in there.”
Sir Keir Starmer is under increasing pressure to recognise a Palestinian state, with 221 MPs signing a cross-party letter demanding he take the step.
The letter is being organised by the Labourbackbencher Sarah Champion, who also sits as the International Development Committee chair.
They write: “British recognition of Palestine would be particularly powerful given its role as the author of the Balfour Declaration and the former Mandatory Power in Palestine.
“Since 1980 we have backed a two-state solution. Such a recognition would give that position substance as well as living up to a historic responsibility we have to the people under that Mandate.”
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1:20
‘Many more deaths unless Israelis allow food in’
Earlier this month, nearly 60 Labour MPs called on David Lammyand the Foreign Office to immediately recognise Palestine as a state in a private letter, but this new call shows how dissatisfied many still are with the government’s refusal to change its stance on the issue.
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As Number 10 came under growing pressure, Sir Keir on Friday released a statement on Gazacalling the “appalling scenes” in the Strip “unrelenting”.
Israel has denied there is a food shortage in Gaza – despite earlier this week more than 100 aid agencies warning of mass starvation in Gaza – and claims it had to take control of the supply and distribution of aid because Hamas fighters have been stealing aid before it reached civilians. Hamas has denied this, as have some humanitarian groups, including USAID.
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Talking about the need for a regional “lasting peace”, the prime minister said: “Recognition of a Palestinian state has to be one of those steps. I am unequivocal about that. But it must be part of a wider plan which ultimately results in a two-state solution and lasting security for Palestinians and Israelis.”
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0:45
Trump: ‘It doesn’t matter what Macron says’
In light of a tweet by the French President Emmanuel Macron, also sent last night, declaring France would recognise a Palestinian state in September at a UN conference, a number of MPs now say Number 10’s current position is untenable.
“They had said they wanted to be in lockstep with allies, but this means that position won’t hold,” said one Labour MP.
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8:07
Emily Thornberry says it’s ‘insulting’ that the Israeli govt rejected a statement calling for a ceasefire
US President Donald Trump, speaking to reporters at the White House before heading to Scotland, was dismissive of Mr Macron’s statement. “What he says doesn’t matter,” he said. “He’s a very good guy. I like him, but that statement doesn’t carry weight.”
Israeli Prime Minister Benjamin Netanyahu said: “We strongly condemn President Macron’s decision to recognise a Palestinian state next to Tel Aviv in the wake of the October 7 massacre. Such a move rewards terror and risks creating another Iranian proxy, just as Gaza became.
“A Palestinian state in these conditions would be a launch pad to annihilate Israel – not to live in peace beside it.
Peter Kyle, the technology secretary, on Friday morning defended the government’s resistance to calls for immediate UK recognition of a Palestinian state.
“We want Palestinian statehood. We desire it, and we want to make sure the circumstances can exist where that kind of long-term political solution can have the space to evolve and make sure that it can become a permanent circumstance that can bring peace to the entire region,” he told Sky News.
“But right now, today, we’ve got to focus on what will ease the suffering, and it is extreme, unwarranted suffering in Gaza that has to be the priority for us today.”
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2:10
Aid waiting to be distributed in Gaza
An emergency call with Germany and France was scheduled for Friday to discuss what Sir Keir described as a “human catastrophe” which has “reached new depths”.
The Foreign Office has maintained it is committed to recognising a Palestinian state but has expressed a willingness to do so only when it will have the “most impact in support of a peace process”.
It said: “We continue to provide lifesaving aid to support Palestinians in Gaza and the West Bank, and to work closely in support of the Palestinian Authority.”