Thames Water, which was on the brink of running out of money, has received a reprieve after a £3 billion loan was approved by the High Court.
The loan provides the UK’s largest water provider with time to resolve its financial issues and may prevent nationalization.
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 loan will cost about £100m in fees and comes with a 9.75% interest rate.
The funding will be released on a monthly, or interim basis as needed, subject to Thames Water satisfying loan requirements including that it has taken on new shareholder investment.
Potential funders had submitted bids to invest in Thames Water and the company said it is now conducting a detailed assessment of each bid.
Loan terms dictate it must be repaid first in the event of administration and existing creditors have their repayment dates set back two years.
The timeline for accessing loan funds 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 company said it is considering when to draw down the money, loaned by so-called A-class creditors.
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.
Some campaigners have called for nationalisation, though the government opposes this.
Thames Water wants a full restructuring, taking in new shareholder investment and swapping debt for a portion of the company for existing creditors.
Its chief executive Chris Weston welcomed the ruling.
"This is good news for our customers, puts our business on a firmer financial footing and enables us to continue to invest in our network and deliver critical infrastructure upgrades for our customers and the environment," he said.
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