The water utility selected the private equity company as preferred partner to help it deal with its debt pile, but warned that bondholders might have to take losses under the firm’s proposal.

Thames Water selected KKR & Co. to enter the so-called Phase 2 diligence stage of its equity process as the preferred partner.

Thames Water has picked US private equity giant KKR as its "preferred partner" to buy the troubled water utility firm. The planned investment by KKR would help it deal with its mountain of debt, and Thames is aiming for the transaction to be completed in the second half of this year.