“It will be very difficult [to secure enough votes for the demerger to pass]”Said a source familiar with the deliberations of the AGL board.
In addition, Cannon-Brookes investment firm Grok has growing confidence that major shareholders will vote against the spin-off instead of abstaining, as it was speculated they could do.
Mike Cannon-Brookes and AGL CEO Graeme Hunt. Credits: Wolter Peeters / Louie Douvis
The company first announced plans to split in two in June last year, a move investors questioned at the time. However, the company believes that the spin-off would unlock shareholder value by creating a carbon-neutral net energy retailer, known as AGL Australia, which could attract financial sponsors who are increasingly moving away from investments in fossil fuels.
Meanwhile, independent power generation company Accel Energy will focus on transforming coal sites into energy centers that could also house renewable energy and batteries.
HESTA, which is believed to own 0.4% of AGL’s shares on behalf of its members, said this week it was not “convinced” that the merger proposal would accelerate decarbonisation to meet the goals of the agreement. Paris climate change to limit global temperature rise to 1.5. degrees.
He also said he was concerned about the risk of coal-fired power plants becoming “stranded assets” and believed the board had not adequately described how it would support communities affected by possible plant closures.
AGL in March advanced the closure of its Bayswater coal plant in NSW from 2035 to 2033, while Loy Yang A in the Latrobe Valley of Victoria would advance the closure date from 2048 to 2045.
However, the announcement disappointed climate activists, including Cannon-Brookes, who have urged the company to align its closing dates with UN calls on developed countries to drop coal electricity by 2030. avoid catastrophic levels of climate change.
Graeme Hunt, CEO of AGL, says this timeline is “over-accelerating” and insists the spin-off is the company’s best option, while accusing Cannon-Brookes of placing “false claims.” and “rhetoric” without a proper plan.