Thames Water Utilities Finance PLC

We view liquidity as adequate, as defined by our criteria, with sources covering uses by 1.47x over the next 12 months (see liquidity section below for details). The negative CreditWatch placement indicates that we could lower the issue ratings by one notch within the next three to six months if we do not gain clarity on additional equity support from shareholders or on progress on the company's eight-year turnaround plan. Depending on the risks we see with the implementation of the transformation plan, we could revise our assessment of the company's business risk profile to strong from excellent. We could lower our ratings on the debt issued by Thames Water if we do not believe equity support is forthcoming, if

...S&P Global Ratings believes the CEO's unexpected resignation with immediate effect in June 2023 increases risks to implementation of the transformation plan, amid uncertainty regarding the timing of additional shareholder injections. The CEO's resignation comes in the second year of the company's eight-year transformation plan. CFO, Alastair Cochran, as well as Strategy and External Affairs Director and previous Ofwat CEO, Cathryn Ross, will act as interim co-CEOs until the company formally appoints a replacement, providing a degree of continuity. We also note that many members of the management team at Thames were put in place in order to execute the turnaround plan. Even then, we believe implementation risks around tackling long-standing operational issues have increased following the CEO's sudden departure, which comes before the company submits its business plan for the next regulatory period in October 2023. Equity support for the current regulatory period has been scaled down while...

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