Thames Water wins first step in deal to secure £3bn lifeline

Thames Water has won court approval to secure a £3bn cash lifeline from some of its biggest creditors.

- Anna Isaac Sandra Laville

The company will need to hold a formal vote to win support from the majority of creditors in January, before its deal is rubber-stamped by the courts in February.

The decision, which covers a complex debt-restructuring effort, was essential to ensure the company has enough money to stave off temporary nationalisation, Thames said.

Lawyers for the water company, which serves 16 million consumers in London and the Thames valley area, said the plan was urgent in order to avoid it running out of money by 24 March next year.

"Moreover, the group provides essential infrastructure services for which it is dependent on its suppliers and employees and, as such, it is critical that the group's liquidity position is clearly stabilised well in advance of that date," they added.

Lawyers acting for the group of senior creditors - known as the "class A" group because the majority hold higher-ranked Thames debt - whose deal was approved yesterday, said theirs was the only immediately viable option for the water company.