- Australia’s largest greenhouse gas emitter AGL Energy (AGL) says it will proceed with its proposed demerger
- The ASX-lister will become Accel Energy and AGL Australia should it receive necessary approvals for FY22
- AGL Energy Chairman Peter Botten says the decision comes amid an accelerated transition in the energy sector and rapid evolution in renewables
- Coal operations are set to continue, but the company says it acknowledges the environmental responsibility that comes with coal
- AGL Energy shares are down 3.95 per cent to trade at $8.75 at 11:15 am AEST
Australia’s largest greenhouse gas emitter AGL Energy (AGL) has confirmed it will proceed with its proposed demerger in a bid to keep up with a rapidly evolving energy sector.
Should it receive necessary shareholder approval, the proposed demerger will result in two new companies —Accel Energy and AGL Australia — listed separately on the ASX in Q4 FY22.
According to the company, AGL Energy is set to become Accel Energy, a power producer that will look to redevelop its sites as “low-carbon” industrial energy hubs.
Accel Energy would then demerge to AGL Australia to become its “leading multi-product” energy retailer.
AGL Energy Chairman Peter Botten said the decision came amid an accelerated energy sector transition and rapid evolution in renewables.
“The impact of recent challenging market conditions on our financial performance emphasises that AGL Energy is now at an inflection point,” he said.
“The clarity of purpose created by this change will protect shareholder value, enabling each business to focus on their respective strategic opportunities and challenges presented by the accelerating energy transition.”
Acknowledging its status as Australia’s largest emitter of greenhouse gases, the company said it would continue to run its coal operations but welcomed the responsibility and opportunities that came with it.
AGL said it would continue to run its coal stations while alternative sources of energy storage and supply were fully developed.
In light of the proposed split, the ASX-lister advised it would be terminating its special dividend program for the remainder of FY21 and FY22 and underwrite the Dividend Reinvestment Plan on ordinary dividends until the demerger.
The company also slightly lowered its earnings guidance, although remaining in the same range, and prepared investors for a “material step-down” in earnings as a result of lower wholesale electricity prices.
AGL Energy shares were down 3.95 per cent to trade at $8.75 at 11:15 am AEST.