AGL Energy announced that will withdraw the demerger proposal to separate the company into AGL Australia and Accel Energy.
This comes as AGL Energy believes that it will not receive the required 75% approval threshold for the demerger proposal.
“The Board of AGL Energy continues to believe that the Demerger Proposal offers the best way forward for AGL Energy and its shareholders, and this was also the view of the Independent Expert. However, the Board believes this path is no longer available,” the company said in a statement.
According to AGL Energy, the company sees the demerger proposal as having the support of a majority of shareholders, but it anticipated the voter turnout to be affected by the opposition of a small number of investors.
In this light, AGL Energy will approach the Court for orders to cancel the scheme meeting.
Moving forward, the company will review AGL Energy’s strategic direction, which will be led by a Board sub-committee co-chaired by Vanessa Sullivan and Graham Cockroft.
The Board “will seek to ensure that the efficiencies gained through the review of the AGL Energy structure as part of the Demerger Proposal are captured in the future,” the company also noted.
The company also announced it will report back to shareholders and investors in September and provide an update on the progress of the review of AGL Energy’s strategic direction at the time of its FY22 results announcement.
AGL’s estimated expenditure to date is approximately $160m of the total $260m estimated cost of the Demerger Proposal.
