Thames Water has been thrown a cash lifeline that will tide the troubled utility giant over until October next year.
The UK’s biggest water group has secured a loan of up to £3bn following fears that it would run out of funding by Christmas.
People close to the deal said it was signed on Thursday evening and shows there is confidence that new and existing investors can reach an agreement to secure the company’s future.
Thames Water’s huge debts have led to speculation it could be taken over by the government, although this would not affect any supplies.
Meanwhile, Thames Water’s 16 million customers are facing a steep rise in bills.
In July, the company had told water regulator Ofwat that it wanted to increase annual bills by 23% between 2025 and 2030.
Since then, Thames has said it needed to raise them by 59%.
Chris Weston, chief executive of Thames, which has £16bn worth of debt, said that the new loan has put the firm “onto a more stable financial footing as we seek a long-term solution to our financial resilience”.
The company’s debt will swell to £17.9bn by the end of next March, it confirmed on Friday.
Its finance chief Alastair Cochran said that the UK government is aware of the firm’s position and has kept in close contact during the negotiations over the new loan.
The water industry as a whole is under pressure to improve. Customers’ bills have been rising – and will continue to do so – but sewage spills into England’s lakes, rivers and seas, for example, doubled last year.
