AGL Energy has advised that it has decided to withdraw from the proposal to separate AGL Energy into AGL Australia Accel Energy via demerger.
The AGL board continues to believe that the demerger proposal offers the best way forward for AGL and its shareholders.
Unfortunately, the board believes this path is no longer viable. Nevertheless, AGL still believes that the demerger would’ve been supported by majority of its shareholders, both retail and institutional, many of whom are long term holder of AGL shares.
However, regarding anticipated voter turnout and stated opposition from a smaller sample of investors including Grok Ventures, AGL believes its demerger proposal will not receive sufficient support. The threshold for a scheme of arrangement needing to reach 75 per cent.
Following the withdrawal, the AGL board will review the company’s strategic direction. This would include considering how the company moves forward in a way that shall create long-term shareholder value and further consultation with a broad range of stakeholders including Grok Ventures and other shareholders, regulators, governments and communities.
Review of the company’s strategic direction will be overseen by a board sub-committee cop-chaired by Vanessa Sullivan and Graham Cockroft. The sub-committee will utilise internal and external resources for the review.
Australia is at a pivotal moment in a transitional period with its energy system. AGL, likewise, remains strongly committed to decarbonisation.
AGL has been in ongoing discussions with key stakeholders in this regard and believes that the relevant dates for closure of coal fired power stations will continue to be accelerated. As Australia’s largest energy generator and owner of one of the largest portfolios of renewable generation and storage assets in the country, AGL and its people have a critical role to play in the transition.
AGL will continue to report back to its shareholders and investors. Similarly, it will provide an update on the progress of the review of AGL’s strategic direction at the time of its 2022 financial year results announcement.
The company will draw upon the work undertaken to date in its review of AGL Energy’s strategic direction and seek to ensure that efficiencies gained via the review of the AGL structure as part of the demerger proposal are captured in the future.
AGL is committed to utilising the demerger withdrawal as a positive tool to continue strengthening the company and prioritising its retail and industrial customers.
To read more on the demerger withdrawal, click here.