The AGL Energy Limited (ASX: AGL) share price has been under pressure lately. Shares in the Aussie energy group fell 1.0% lower on Friday to close at $8.71 per share.
That’s a new 52-week low for the electricity generator and retailer or ‘gentailer’, so what does May 2021 look like from here?
Why the AGL Energy share price is at a 52-week low
April was a busy month for the Aussie energy company. AGL announced on 30 March that it intended to create a demerger of sorts to create “two leading energy businesses”.
That plan was unveiled by AGL managing director and CEO, Brett Redman. Mr Redman said there will be a structural separation of the existing group into:
- “New AGL”, Australia’s largest multi-product energy retailer focused on low carbon; and
- “PrimeCo”, Australia’s largest electricity generator.
The proposed structural separation was designed to give each business more freedom and further drill down into key areas of the Aussie electricity market.
That was all well and good, but the plan has changed. Mr Redman abruptly announced his resignation on 22 April and caused a rapid reshuffle at AGL during the month.
AGL chair Graeme Hunt will become interim CEO and managing director, while non-executive director Peter Botten has been appointed chair.
News of the leadership change saw the AGL share price fall lower in April. The announcement took many in the market by surprise given Mr Redman’s short tenure and structural plans. The Aussie energy company has commenced a search for its next CEO willing to commit to the transition phase.
What else is happening for AGL?
Leadership changes weren’t the only thing moving the AGL share price in April. AGL announced that its joint venture with Mercury NZ Ltd (ASX: MCY), Powering Australian Renewables (PowerAR), had increased its offer price to acquire Tilt Renewables Ltd (ASX: TLT).
The revised NZ$8.10 per share or NZ$3.07 billion offer came after Canadian pension fund CDPQ had lobbed a late competing offer for the Kiwi renewables group. That was ultimately enough to clinch the deal for Tilt over and above CDPQ.
There have also been concerns about testing domestic electricity and gas supply and demand issues. Market commentators and regulators continue to watch the market to ensure ongoing electricity security, particularly in the retail market.
The AGL share price has been under pressure in April. Shares in the Aussie energy company are sitting at a 52-week low prior to Monday’s open as the latest CEO departure makes investors wary.