Infrastructure investment firm Covalis Capital has put forth a bid for Thames Water, planning to collaborate with French water management company Suez as its operational partner.

Under this proposal, Covalis Capital intends to contribute approximately £1 billion initially while seeking an additional £4 billion through asset divestitures, refinancing, and by publicly listing portions of the company, according to reports from the Financial Times.

The UK government is expected to retain a “golden share,” which would provide it with enhanced rights, including a position on the board of directors, as per the newspaper’s insights.

Suez currently manages water operations in France and employs around 5,000 staff in the United Kingdom, but it would not acquire any equity in Thames Water under the proposed arrangement.

Thames Water has set a deadline of Thursday for preliminary bids, as it seeks to secure at least £3.3 billion in new equity to avoid the necessity of entering special administration, effectively a temporary nationalisation.

Final bids are expected to be submitted in January, following a decision from regulator Ofwat regarding allowable increases in water tariffs. Thames Water is requesting authorization to raise rates by 53 percent by 2030.

The company has issued warnings concerning its outdated infrastructure, which it claims could pose a “risk to public safety.” Existing investors, including sovereign wealth funds from China and Abu Dhabi, have labeled the business as “uninvestable.”

The potential restructuring has been further complicated by Ofwat’s delay in setting the equity return levels that water companies can anticipate for the next five years, which will not be revealed until December 19.

Additionally, Castle Water, the UK’s leading provider of water to businesses and public sector entities, is reportedly willing to take control of Thames Water in exchange for a financial rescue package potentially worth up to £4 billion.

Having acquired Thames Water’s non-household customer segment in 2017 for £100 million, Castle Water has grown significantly and now achieves annual revenues of approximately £434 million.

Covalis’s bid is contingent on Thames Water securing a £3 billion emergency loan aimed at providing the company with immediate liquidity to avert a cash crisis in the coming year, according to the Financial Times.

In a statement, a representative for Suez noted, “Currently, Suez’s role is focused on advisory support to ensure the project’s success and meet the specific challenges faced by Thames Water.

“Suez emphasizes the importance of aiding Thames Water in its operational recovery and long-term viability in compliance with regulatory standards.”

Both Thames Water and Covalis Capital have opted not to comment on the ongoing discussions.