- Shares in AGL Energy (AGL) have fallen to their lowest point in around 16 years after its Managing Director and CEO Brett Redman said he would resign
- As a result, AGL’s Chairman Graeme Hunt will also step down and assume the role of Interim Managing Director and CEO
- Non-Executive Director Peter Botten will take on the role as Chairman, effective immediately
- Redman said he could not make a commitment beyond AGL’s proposed restructuring, which would create two distinct energy businesses
- Shares in AGL are down 1.66 per cent to $8.91 each
Shares in AGL Energy (AGL) have fallen to their lowest point in around 16 years after its Managing Director and CEO Brett Redman said he would resign.
After almost 15 years with the company, two-and-a-half of which were spent at the helm, Redman advised the Board that he could not make a long-term commitment beyond AGL’s proposed structural separation.
Australia’s top power producer and energy retailer revealed on March 30 that it would split itself in two in a bid to revive its battered share price and attract new investors.
The restructuring would create two new businesses tentatively titled New AGL and PrimeCo. New AGL would position itself as a carbon-neutral retailer delivering electricity, gas, internet and mobile services, while PrimeCo would hold the company’s coal-fired power plants and wind farms, acting as a supplier to New AGL and other retailers.
Redman’s resignation as a Director is effective immediately, although he will remain available until the expiry of his notice period on October 21.
“The timing of my departure will enable the leadership team to be established to execute upon the separation strategy and lead the business into its next chapter,” Redman said.
As a result, AGL’s Chairman Graeme Hunt will also step down and assume the role of Interim Managing Director and CEO, tasked — for the time being — with leading the company through a planning process for the restructuring.
Non-Executive Director Peter Botten will take on the role as Chairman, effective immediately.
Redman’s departure has come as a shock to both investors and analysts, particularly given his enthusiastic promotion of the split since it was unveiled.
“Despite the share price performance — which makes for pretty grim reading — he was still quite a new CEO,” said an analyst who declined to be named.
“He was trying as hard as he could to take the business in a new direction.”
Questions regarding Redman’s ability to lead AGL started surfacing after it disclosed last month that $100 million had already been spent on a gas import project despite a final investment decision (FID) not being reached.
The project, which had been hailed as a potential solution to winter gas shortfalls anticipated to hit Victoria and NSW in the next few years, was subsequently blocked by the Victorian Government at the end of March.
“That’s a lot of money to have spent on a project that hasn’t made an FID. That attracts investors’ attention,” the analyst added.
Shares in AGL are down 1.66 per cent to $8.91 each as of 1:03 pm AEST — a low not seen since the start of 2005. So far this year, the company’s shares have fallen more than 26 per cent.