Carillion today received an early Christmas present after lenders agreed to give the ailing contractor four months of breathing room and defer the testing financial covenants.
Today Carillion said it had "received all necessary consents and the deferral of its financial covenants has become effective".
Carillion shares rose four per cent in morning trades.
If tested and breached at the end of December, banks could have stepped in and taken control of the company, potentially wiping out shareholder value.
But today's announcement means Carillion has until 30 April before covenants will be tested.
Carillion has endured a nightmare second half of 2017 after revealing more than £1bn of contract write-downs. Management has failed to arrest a share price collapse that sees the company worth less than £70m, compared with more than £1bn at the start of the year.
Analysts have been shocked that it took four months and a further erosion of shareholder value before banking covenants were forecast to be breached.
Yesterday, City A.M. revealed the depths of the problems at Carillion with a special report detailing how demoralised staff felt cut-off from management and that their efforts were being undermined by the mitigating actions put in place by the company.
Today interim boss Keith Cochrane breathed a sigh of relief at convincing banks to defer the covenant testing.
“We believe that our lenders’ decision to defer the test date demonstrates their continuing support. We remain focused on actively progressing a constructive dialogue with our financial stakeholders on the group’s recapitalisation plans," he said.