The AGL Energy Limited (ASX: AGL) share price is continuing to fall, hitting a new 52-week low today.
The ASX-listed energy company's shares have been on a multi-year decline. In 2017, the AGL share price hit an all-time high of $27.70 per share. Since then, shares have gradually eroded. At the time of writing, shares are down 2.36% on yesterday's closing price to $7.87.
Consequently, one of Australia's oldest companies is now trading at its lowest level since July 2004.
Investors seem to be growing unsure about AGL's future with a proposed demerger a possible catalyst.
Uncertainty leaves the AGL share price bleeding
On 30 June 2021, AGL announced its intention to proceed with the proposed demerger. A swift 11% drop in the AGL share price followed. However, the company believes it would be in the best interests of shareholders.
The two separate entities will be known as Accel Energy Limited and AGL Australia Limited. One will focus on the accelerating energy transition, while the other will be a multi-product energy retailing business.
AGL Energy chairman Peter Botten said:
…the impact of recent challenging market conditions on our financial performance emphasises that AGL Energy is now at an inflection point, as the transition of the energy sector accelerates, driven by the rapid evolution in renewables and decentralised energy technology, customer needs and community expectations.
These impacts include falling wholesale electricity prices caused by an increased supply of solar and wind-generated electricity. Unsurprisingly, this has also weighed on the AGL share price.
Next steps
In the meantime, shareholders are waiting patiently to see whether the proposal receives regulatory approvals. According to the previous announcement, the demerger remains conditional on the final AGL board, Australian Tax Office, regulatory, court, and shareholder approval.
Additionally, shareholders are expected to vote via a scheme booklet in the fourth quarter of FY22. In any case, investors will be hoping the losses stem soon.
The AGL share price has collapsed 34% so far in 2021. Likewise, the market capitalisation of the company has tumbled to $4.92 billion.
