Thames Water, which was due to run out of money, has been given a lifeline after a £3bn loan was approved by the High Court.
The loan gives the UK’s biggest water provider time to sort out its finances and could ward off nationalisation.
Court approval had been needed for the rescue plan centred on an emergency £3bn loan.
The business is provisionally attempting to borrow its way out of its financial problems as it struggled with £16bn in debt.
It had said it would run out of money by 24 March.
It will now receive an initial tranche of £1.5bn to fund it until September 2025. The company said it is considering when to draw down the money, loaned by so-called A-class creditors.
The timeline depends on the impact of a potential appeal process by B-class creditors. They had objected to the loan as they face being wiped out completely in a restructuring.
The loan will cost about £100m in fees and comes with a 9.75% interest rate.
Its terms dictate the loan must be repaid first in the event of administration and existing creditors have their repayment dates set back two years.
The government has been on standby to put Thames Water into special administration, a form of temporary nationalisation aimed at keeping the taps on in the event of financial collapse.
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Content Source: news.sky.com