AGL Energy’s board will meet Monday morning and is expected to drop a plan to split its operations, succumbing to billionaire climate activist Mike Cannon Brooks’ campaign to thwart the move.
Neither AGL, Australia’s largest generator of electricity, nor Canon Brooks would comment on the meeting, but bankers and consultants briefed some media over the weekend that the dismissal would be cancelled.
An insider told Guardian Australia that the board itself and management roles were “up in the air”, and Cannon-Brooks appears to have succeeded, at least for now.
AGL had scheduled a shareholder meeting for June 15 to vote on a plan to separate the generating arm into a new company, Accel Energy, and the retail arm of AGL Australia. 75% of shareholders need to approve the plan, which is planned by the end of June.
Canon-Brooks shocked the company this month when he announced that he had bought an 11.28% stake, making him the largest single shareholder. He vowed to prevent the split, saying it would destroy shareholder value as well as delay the shutdown of AGL’s remaining coal-fired power plants.
AGL itself said the dismissal would incur significant costs, including $260 million up front.
Cannon Brooks said last week through his family’s company, Grok Ventures He wanted two seats on the board.
Media including financial audit On Monday, it reported that CEO Graeme Hunt will be leaving AGL, because the severance plan is now doomed to fail. Other investors, including pension fund Hesta, which owns about 0.36%, said they would oppose the separation.
Earlier this year, Cannon-Brookes joined forces with Canadian asset manager Brookfield in a bid to acquire the private AGL at $8.25 per share but was turned down. Inventory It closed at $8.87 Friday.
The competition over the future of the 180-year-old company comes as wholesale prices soar to record levels of more than $300 a megawatt-hour in parts of the national electricity market serving Australia’s eastern states. Rising gas costs and outages of coal-fired power plants are major factors driving prices higher.
Retail prices are on the rise, too, with the default supply set by the Australian energy regulator last week raising the benchmark market supply from July 1 by as much as 18%.
AGL operates three coal-fired power plants in New South Wales and Victoria. The Liddell power plant in Hunter has already shut down one of its four units and will shut down the other three by next April.
In February, AGL brought the closing dates of the other two terminals – Bayswater in Hunter and Loy Yang A in Victoria – by several years. Cannon-Brooks argues that the termination should come much sooner and that a healthy company would be better equipped to transition to renewable energy and giant storage, helping to significantly reduce Australia’s greenhouse emissions in the process.
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