China invests in Thames Water

 

China's state-run investment fund dipped its toe into the UK today by snapping up a slice of the country's biggest water and sewerage firm.

China Investment Corporation's swoop for 8.7% of the holding company that owns Thames Water follows a visit by Chancellor George Osborne to Beijing this week to forge closer ties between the two countries. It is thought to be the sovereign wealth fund's first investment in the UK.

Thames Water's holding company Kemble Water is owned by a consortium of investors led by Australian bank Macquarie. In December, another huge sovereign wealth fund, the Abu Dhabi Investment Authority, bought 9.9% of Kemble.

The water company provides sewerage services to about 14 million customers and water to 8.8 million. It has customers in London, Berkshire, Buckinghamshire, Gloucestershire, Kent, Oxfordshire, Surrey and Wiltshire.

Thames recently said pre-tax profits more than halved in the year to the end of March to £208.5 million, down from £453.6 million the previous year, as the group absorbed the new price regime for the five years to 2015 imposed by regulator Ofwat.

The utility provider was sold by German utility group RWE, which owns npower, for £8 billion in 2006.

The consortium of investors led by Macquarie had to fight off three other serious bidders in the 2006 auction, including one led by the Qatar Investment Authority.

The Chinese fund was set up in 2007 to invest some of China's billions of pounds of spare cash it has built up from selling its products around the world.

There have been reports that the UK Government is considering setting up its own sovereign wealth fund to take advantage of its low borrowing costs, which would see it look to make similar investments overseas.

Numerous parts of the UK's infrastructure have fallen into foreign hands in recent decades following their privatisation.

In the last 10 years, Ferrovial of Spain has bought BAA, the operator of Heathrow and Stansted Airports, Germany's RWE has acquired npower, and Australian bank Macquarie has taken control of car parks by buying NCP.

German group Deutsche Bahn recently bought rail and bus operator Arriva, while ports company P&O, which owns UK assets at Tilbury and Southampton, was also bought by Dubai-based DP World in 2006.

PA

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory