AGL Energy has abandoned its plans to split its coal-fired generation business and announced that its CEO Graeme Hunt and President Peter Botten will leave the company.
In a statement to ASX, the company said it did not have enough shareholder support and would now conduct a strategic review of its operations.
Atlassian founder Mike Cannon-Brookes, who is the company’s largest shareholder, had called for the spin-off to be abandoned since it launched an unsuccessful takeover bid earlier this year.
AGL’s coal and gas power plants are the main sources of greenhouse gas emissions in Australia, accounting for about 8% of the country’s carbon footprint.
Mr Hunt and many AGL directors who are now also leaving the company had argued for months that the split would unlock value for shareholders.
But the board lost confidence that its plan to split AGL’s coal-fired retail and power generation companies would get the necessary 75 percent approval when it went to the polls on June 15.
Its strategic review will now be overseen by a board subcommittee that will inform shareholders in September.
“While the board believed the proposed merger offered the best way forward for AGL Energy and its shareholders, we made the decision to withdraw it,” Botten said.
“The board of directors will now take strategic direction, change the composition of the board and management and determine the best way to deliver long-term value to shareholders.”
Four board members, including Mr. Botten, Mr. Hunt, non-executive directors Jacqueline Hey and Diane-Smith Gander will resign.
Cannon-Brookes, one of Australia’s richest people, has urged shareholders to reject the split, arguing that if AGL unloads its assets it will do nothing to reduce emissions and tackle climate change.
Cannon-Brookes has an 11.28% stake in AGL.
HESTA, which owns 0.36 percent of AGL’s shares on behalf of its members, said last week that it was not “convinced” that the merger proposal would accelerate decarbonisation to meet the goals of the climate agreement. of Paris to limit the rise in global temperature to 1.5 degrees Celsius.
HESTA CEO Debby Blakey said the retirement fund would vote against AGL’s proposal to separate its coal energy interests in the new Accel company.
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