There was a major article about AEJ in today's AFR. The article mentioned the agreement with the North-West Shelf being the result of 12 months of arbitration and talks, and how investors worry that AEJ faces similar headaches as other supply contracts come up for renewal.
An unnamed analyst is quoted in the article as saying that AEJ has been been hit hard by huge price increases that have brought the company to its knees and that they have heard nothing about the expiring contracts. The question of why Origin and AGL haven't rushed in to snap up the business was asked and the answer given by the analyst was that they know the risks involved in the company and won't touch it as a result.
Risks linked to the company are the difference between AEJ and PIH the analyst said. Difficulties securing gas are matched with a political climate that erodes the value of dirty coal-fired power plants such as Oakey.
PIF sold a 40% stake in the company and a share in the key asset DBCT to Canadian company Brookfield Asset Management. Another unnamed analyst was quoted as saying that AEJ were trying to do something similar to PIH but that there weren't many buyers.
AEJ's options for a rescue include a massive sale of new shares, spinning off assets and finding a cornerstone investor. The article quoted a source close to the company as saying that they will do whatever it takes including a recapitalisation and/or asset sales should they be in the best interests of all stakeholders.
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