thanks for the reply... I will read the scheme booklet fully and have been mostly abreast with the news. For now though.
No - I do not think MCB is the golden child here either, but I think people have dismissed him out of hand due to him not being an old hand in the electricity sector... sometimes - fresh angles produce results.
Does the board have the confidence of the majority??? I don't think so - how many strike votes have they had since 2017?. IMO... other than social / ethical screens knocking AGL from some funds... I would have thought that if the board did have a majority confidence holder... they would be a substantial holder... TLDR AGL is widely held BECAUSE there isn't a confident majority, rather many holders who (did once?) see it as a secure dividend stream
here is the rub: "Grant Samuel & Associates Pty Limited, the independent expert appointed by AGL Energy to review the proposed Demerger"
The only independent experts view that the AGL board would use in a demerger proposition are ones that support their intention of the demerger... GS&A has been financially motivated to support the decisions of the board with supporting stats and metrics.
I do agree that the SP did track wholesale electricity prices ... and also the profitability of the company - which was impacted by impairments which are squarely at the feet of management and BoD on how they chose to structure the balance sheet of the company. Fundamentally though - AGL has become much weaker than it was in 2017 - It has an older portfolio of assets and using a capital light approach to generation means they have less direct ownership and more exposure to PPAs which due to hedging... may - or may not protect them against the movement in the NEM spot price.
AGL BoD is proposing that this demerger is a good idea... because they have not built enough new generation - they no longer own best LCOE assets... nor can their existing capital structure afford to fund such a development. They have made a mess with everything that was done pre Redman... to the point it appears easier to split than fix.
There will be a minimum of 160m incurred costs even if the plan fails. ouch.
AGL Price at posting:
$8.35 Sentiment: Hold Disclosure: Held
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