Creditors back £3bn package designed to save Thames Water from collapse

Thames Water has gained support from its top-ranking creditors to proceed to the next stage of securing a £3bn emergency funding package intended to stave off its collapse for at least a year.

- Jasper Jolly Anna Isaac

The struggling utility company said yesterday that 75% of the holders of its least risky loans - known as class A debt - had backed a plan to extend the cash lifeline, the minimum threshold needed to receive court approval for changes to its debts.

Thames faces the prospect of temporary nationalisation if it ultimately collapses, and the emergency funding would help the company avoid a short-term cash crunch.

The support will smooth the path for court hearings to decide whether to approve the deal.

Another group of creditors, who hold riskier class B debt, have offered a competing deal, but Thames has so far endorsed the class A offer. It said reaching the 75% threshold meant that it could push ahead with a first court date on 17 December.