The AGL Energy Limited (ASX: AGL) share price is slipping this morning amid reassurances regarding the company’s now-cloudy future.
A planned demerger that would have seen AGL split into energy retailer AGL Australia and energy producer Accel Energy was binned last week on the expectation it wouldn’t receive adequate shareholder support.
Today, AGL chair Peter Botten reassured shareholders of its path forward. That path will include a promised review into the company’s strategic direction and some notable board and management changes.
At the time of writing, the AGL share price is $8.14, 1.09% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is higher today, having gained 0.35%. The company’s home sector – the S&P/ASX 200 Utilities Index (ASX: XUJ) – is also up 0.59%. Though, the S&P/ASX 200 Energy Index (ASX: XEJ) has slumped 2.2%.
Let’s take a closer look at the latest news on the embattled energy giant.
Here’s the latest on AGL’s path forward
The AGL share price is in the red on Thursday. It comes as the company’s chair reaches out to shareholders to inform them of the company’s plans for the future.
AGL committed to a review of its strategic direction when it announced the withdrawal of its planned demerger.
The review aims to develop a strategy to create an integrated AGL. Such an AGL will be able to build shareholder value and take on a key role in helping Australia meet its energy requirements in the energy transition, said Botten.
AGL has the opportunity to play our part in helping Australia achieve net zero and will do so by leveraging our extensive energy and innovation expertise.Botten said in a letter to shareholders today
The review has four major targets. It will:
- Explore plans made for both AGL Australia and Accel Energy, focusing on which initiatives should be retained, reviewed, or stopped
- Look at pathways AGL could take towards decarbonisation
- Analyse the energy asset portfolio required to speed up decarbonisation, as well as the company’s role in providing needed energy and capacity
- Assess and review options for AGL’s capital structure and funding providers
The company also updated investors on upcoming changes to its board and management.
Both Botten and AGL CEO and managing director Graeme Hunt agreed to step down following the demerger’s failure.
Today, Botten said the process to find a new chair is well advanced, having built on work undertaken as part of the demerger process.
The company has also started a global search for a new managing director and CEO.
We are committed to ensuring that these processes are both thorough and timely to ensure stability of leadership to take this company forward.Botten’s letter reads
AGL will provide an update on the review when it releases its financial year 2022 results. The initial outcomes of the review are expected to be presented in September.
AGL share price snapshot
Despite plenty of drama, the AGL share price has been outperforming in 2022. It has gained 29% year to date.
Though, it’s still nearly 11% lower than it was this time last year. It’s also 67% lower than it was five years ago.