Own AGL shares? Boss says Cannon-Brookes made ‘false claims’

AGL’s CEO is advising investors to “focus on the facts” when voting on the proposed demerger.

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Key points

  • AGL CEO and managing director Graeme Hunt has slammed comments made by Mike Cannon-Brookes criticising the company's proposed demerger
  • The company's boss expressed his hope that AGL investors will "focus on the facts" when contemplating how to vote next month
  • Hunt also said recently revised closure dates for Bayswater and Loy Yang A could be brought forward again and the company is set to benefit from higher power prices in the future

The AGL Energy Limited (ASX: AGL) share price has been suffering amid an avalanche of news on the company’s demerger.

Now, AGL CEO and managing director Graeme Hunt has advised shareholders to “focus on the facts” as they prepare to go to the polls.

Hunt addressed the dramatic stance made by tech billionaire Mike Cannon-Brookes, labelling some of the claims being made against the plan as “false”.

At the time of writing, the AGL share price is $8.305, 0.91% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.47% on Thursday.

AGL CEO slams Cannon-Brookes’ claims

The AGL share price is in the green on Thursday. Its gain comes as Hunt addresses the Macquarie Australia Conference in a week of uncertainty for AGL’s momentous demerger plans.

I do think it would be rather odd for me to stand up here today and not address the recent commentary following the initial substantial holder notice … and some of the false claims being made about AGL, as part of the justification for the position it has taken on the proposed demerger.

Hunt said he hopes shareholders “focus on the facts” when deciding how they’ll vote at next month’s scheme meeting.

If approved, the demerger will see AGL Energy split into energy retailer, AGL Australia, and energy producer, Accel Energy.

Cannon-Brookes’ investment vehicle, Grok Ventures, is AGL’s newly minted largest shareholder. It’s also behind the Keep it together Australia campaign against the demerger.

Hunt has disputed some of Grok Ventures’ claims on Thursday.

Notably, he argued statements claiming AGL has failed to invest in renewable generation, that it will have fewer financing opportunities post-demerger, and that the company is behind the ball on decarbonisation, are false.

He said AGL has support from its banking group. Additionally, both AGL Australia and Accel Energy have defined debt financing arrangements and capital structures. Both entities also have provisional investment-grade credit ratings.

What else did AGL disclose at the conference?

While it’s unlikely to have shifted the AGL share price today, Hunt outlined the company’s current market conditions and an update on when the market might see the demerger’s documents.

Additionally, the CEO announced newly revised closure dates for the Bayswater and Loy Yang A coal-fired power stations are “not the end of the story”.

“Accel Energy will continue to challenge these closure dates and look to see how they can improve on this, should the system be able to accommodate this in an orderly and responsible way,” said Hunt.

The company has also seen forward pricing grow since January. It’s now above $100 per megawatt hour for financial years 2023 and 2024.

That’s particularly evident in New South Wales, Victoria, and Queensland.

The increase is born from high commodity prices, recent news of withdrawals from coal-fired power, and risks from an ageing thermal generation fleet.

Hunt also noted the demerger scheme booklet will be released shortly.

The document will be under the eye of the Supreme Court today, according to the Australian Financial Review.

The company reportedly expects the booklet will be released on Friday, subject to approval from both the court and ASIC.

AGL share price snapshot

The AGL share price is back in the green on Thursday. Though, it’s still 4% lower than it was at the end of last week. Luckily the stock has plenty of cushioning to absorb the drop.

This week’s slump included, the AGL share price is 31% higher than it was at the start of 2022.

However, it’s still 9% lower than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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