Thames Water has secured a £3 billion emergency loan as a company owned by the Tory treasurer looks to buy a controlling stake in the embattled utility.
Britain’s biggest water supplier confirmed yesterday that it has agreed a loan with its creditors to help the company survive for at least a year after fears it could run out of cash by Christmas.
The deal came about as Castle Water, co-founded by property magnate Graham Edwards, the Conservative Party treasurer, pressed ahead with plans to take a major stake in Thames with the intention of putting the company on the market within three years.
The crisis-hit utility, which has a £16 billion debt pile, faced a possible government bailout if it failed to raise emergency cash from its existing creditors.
The financing will allow trading to continue until October next year.
Delay: Crisis-hit utility, which has £16 billion in debt, faced a possible government bailout
Yesterday it revealed it had just £500m left to continue operating. Thames will have to pay an interest of 9.75 percent on the loan – well above the market rate.
Chief executive Chris Weston said the funding will help put Thames Water on a “more stable financial footing”.
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