A Hong Kong company has submitted an initial £7-billion ($8.8 billion) bid for a majority stake in Thames Water, a heavily indebted UK water supplier, the Financial Times said Friday.
CK Infrastructure, part of the CK Hutchison group, put forward the non-binding offer earlier this month, but expects the utility's bondholders to take significant writedowns, according to two people close to the issue.
The news came after a UK court on Tuesday approved a £3 billion emergency loan for Thames Water, offering it a lifeline as it buckles under a mountain of debt.
The loan provides a short-term solution to keeping the company -- faced with debts of £16 billion -- afloat while it finds the necessary funding to stave off a costly public bailout.
Thames Water did not comment on the FT report when asked by AFP.
If the company that serves 16 million customers, or a quarter of the UK's population, fails to find the funding, it will have to call on the state to bail it out.
Such a rescue would be a blow to the government in the face of tight public finances.
Thames Water -- owned by a consortium of shareholders including Canada's Ontario Municipal Employees Retirement System and the British Universities Superannuation Scheme -- has recently attracted interest from private buyers.
Infrastructure investor Covalis Capital proposed an upfront buyout offer of £1 billion, with the potential to bring in French utility giant Suez.
According to the Financial Times, Thames Water has also received other offers including a £4 billion bid from American investment fund KKR.