The ratings on Aquila Inc. reflect the company's strained liquidity position, execution risk associated with proposed asset sales, and insufficient cash flow to offset a burdensome debt level, not quite mitigated by management's efforts to restructure the company as a traditional regulated utility business. Aquila's restructuring plan is heavily dependent on continued asset sales, prompting concern over the heavy execution risk involved with an asset-sales strategy. Weak market conditions increase this risk, as evidenced by the delay in the sale of Avon Energy Partners Holdings. Due to weak cash flow generation from operations, asset sales are necessary for Aquila to reduce its debt levels and shore up its balance sheet. Still, cash flow generation relative to total debt is likely
