SW (FINANCE) I PLC

(LEGAL ENTITY IDENTIFIER: 549300BHN1HB5BNG2R96)

SOUTHERN WATER SERVICES LIMITED

CORPORATE UPDATE: FURTHER EQUITY COMMITMENTS

SW (FINANCE) I PLC (the "Company")

SOUTHERN WATER SERVICES LIMITED ("Southern Water" and together with the Company, the "SW Group")

·    Following the £655 million of binding equity commitments provided in July 2025, Southern Water secures a further £245 million of binding equity commitments as planned

·    Funds managed by Macquarie Asset Management ("MAM") reconfirm intention to provide up to £300 million of additional equity commitments during H1 2026

·   In parallel, funds managed by MAM indicate intention to support further reduction in leverage by 2029

30 December 2025

On 1 July 2025, Southern Water announced it was seeking to raise up to £1.2 billion of equity to support its 2025-30 AMP8 investment programme. This follows circa £1.65 billion of equity that was invested into the group during the previous 2020-25 regulatory period.

This £1.2 billion comprised an initial £655 million of binding equity commitments (the "Initial AMP8 Equity Commitment") from the group's parent company, Sandstone Bidco Limited ("SBL"), via funds managed by MAM and up to a further £545 million intended to be raised, with at least £245 million of this expected to be committed by 31 December 2025.

In line with this expectation, Southern Water is pleased to confirm that the £245 million equity from SBL, via funds managed by MAM, is now a binding equity commitment (the "Second AMP8 Equity Commitment"). This latest equity commitment underscores the continued belief in the strength of Southern Water's case for its AMP8 regulatory appeal to the Competition & Markets Authority, as well as in the UK Government's stated intention to implement reforms to improve the investability of the water sector in England and Wales. As such, the Second AMP8 Equity Commitment - which has been provided on the terms of an equity commitment letter of today's date - is not subject to any conditions.

In aggregate, the Initial AMP8 Equity Commitment and the Second AMP8 Equity Commitment represent £900 million of binding equity commitments.

Of the Initial AMP8 Equity Commitment, Southern Water drew £505 million in November 2025 and expects to draw the remaining £150 million by 31 March 2026. For the Second AMP8 Equity Commitment, Southern Water expects to draw the entire £245m between 31 March 2026 and 30 June 2026.

In addition to the Second AMP8 Equity Commitment, SBL has today re-confirmed its intention, via funds managed by MAM, to provide up to a further £300 million of binding equity commitments (the "Third AMP8 Equity Commitment") by 30 June 2026, with the anticipated draw down of these funds by Southern Water expected to be on or around 31 March 2027.

In parallel, SBL has expressed its intention, via funds managed by MAM, to support Southern Water to further reduce its leverage (as measured by the ratio of net debt to regulatory capital value) from circa 74 per cent as at 31 March 2025 to 65 per cent by 2029.

Southern Water CEO, Lawrence Gosden, commented:

"We are pleased to have confirmation of £245 million of incremental equity support from funds managed by Macquarie Asset Management, in line with what was signalled to the market in July 2025. This is in addition to £655 million of equity already committed in July 2025, as well as an intent for up to a further £300 million of equity commitments in H1 2026.

The incremental £245 million equity commitment takes our shareholders' total investment in the Southern Water group since 2021 to over £2.5 billion. This support has been vital as we implement our largest ever investment programme, including more than £6 billion of growth investment in the 2025-30 AMP8 period to deliver additional capacity and resilience of our infrastructure and services to meet new legislation and environmental standards as well as the expectations of our customers."

For further information, please contact Stuart Ledger (Group CFO) at:

Address:       Southern House, Yeoman Road, Worthing, BN13 3NX, United Kingdom

Tel:               01903 272 611

Email:           [email protected]

MEDIA INQUIRIES: Peter Hewer, Greenbrook.

Tel 0770 932 6261 Email: [email protected]

DISCLAIMER - INTENDED ADDRESSEES

This announcement is released by Southern Water Services Limited and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of United Kingdom assimilated domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"), encompassing information relating to the Proposals described above. For the purposes of UK MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, this announcement is made by Richard Manning (Company Secretary) at Southern Water Services Limited.

This announcement is a communication to the market. Nothing in this announcement constitutes an offer of securities for sale in the United States or any other jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document.

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