Shareholders in AGL Energy have little choice but to support the costly, drawn-out process of splitting into a green retail operation and a coal-fired power rump. The alternative is too awful to contemplate.
Accel Is A Hard Act To Sell For New AGL
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While AGL Energy’s split is supposed to set up both demerged entities for success, the jury’s out on whether funding provisions are adequate for both companies to pursue its growth ambitions.
-Greater clarity needed on dividend policies
-Brokers’ worry funding won’t support future growth
-Further earnings downgrades likely
By Mark Story
As far as embattled energy giant AGL Energy ((AGL)) is concerned the tilt towards renewable energy is very much a two-edged sword. Falling wholesale electricity prices, courtesy of renewable energy, are directly responsible for the company’s long awaited split
AGL to split from coal plants in demerger
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Embattled electricity giant AGL Energy will split itself in two separately listed businesses to better handle the rapidly transforming energy market, separating its base coal power plants into a new company, Accel Energy, to be headed by existing interim CEO Graeme Hunt.
The retail business backed up by renewables generation and gas power – and with a carbon-neutral portfolio in terms of direct emissions – will be called AGL Australia and will be headed by AGL’s existing chief customer officer, Christine Corbett as CEO.
AGL’s Christine Corbett will run the retail business.
AGL (ASX:AGL) share price on watch following demerger update
Another ASX 200 company is planning to split into two…
James Mickleboro has been a Motley Fool contributor since late 2015. After studying economics at university back home in the United Kingdom, James came to live in Australia and managed to land a job at an Australian fund manager. This was the start of a love affair with Australian equities and he hasn t looked back since. James is part of the CFA Institute s Chartered Financial Analyst program and hopes it teaches him how to become an astute investor which allows him to help others with their own investing. Outside of reading and researching he spends many a late night watching the English Premier League and Seinfeld reruns.