It was labelled 'investment-ready' six short months ago. Yesterday, it entered voluntary administration. Any hopes of seeing Sun Cable — a $35 billion solar power project — hit the ASX boards in the near future have been thrown into doubt.
Originally, the team was aiming to supply electricity to Darwin by 2027. Full operations were ambitiously being targeted for 2029. Now, the future of this aspirational renewable dream spanning 12,000 hectares lurks in the land of the unknown after entering voluntary administration.
The straw that broke the camel's back is an interesting one.
Unstoppable force meets the immovable object
In a statement shared yesterday, Sun Cable revealed it had gone into administration — rocking the Australian renewable industry. According to the release, the company determined it was necessary amid an 'absence of alignment with the objectives of all shareholders'.
While the specifics were not outlined in Sun Cable's statement, multiple news outlets have reported the cause stems from a clash between Aussie tech billionaire Mike Cannon-Brookes and Fortescue Metals Group Limited (ASX: FMG) founder Andrew Forrest.
Getting billionaires involved in your project can have its perks — namely funding its development. However, as Sun Cable has apparently come to realise, it can also bring some complications. In short, they who hold the capital hold control.
It is believed Forrest had become dissatisfied with the rate of cash burn and the lack of milestone achievement occurring at Sun Cable. In March last year, the two green energy advocates tipped into Sun Cable's series B $210 million funding round — capital which was meant to see it through to late 2023.
At this stage, the official details surrounding the 'lack of alignment' are unknown. Though, based on numerous reports, it is believed to be differences in opinion of how Sun Cable should be funded between Cannon-Brookes and Forrest.
Will Sun Cable see the light of day again?
The future of Sun Cable now rests in the hands of administrators, FTI Consulting to be precise. Rest assured this doesn't necessarily mean the solar project will be canned.
Describing Sun Cable's possible future, Climate Energy Finance director of public interest, Tim Buckley, said:
This [current funding situation] is dead, but that doesn't mean the whole vision's dead, that the company's dead. It can be resurrected.
To be 'resurrected' Buckley thinks the project could take on a new corporate structure. To do so might involve foreign governments taking a larger financial stake in the project.
Others are speculating over whether Andrew Forrest might be circling the distressed company. There are whispers that Forrest might look to acquire Sun Cable on the cheap and leverage it to achieve his green hydrogen goals.
For now, Sun Cable making an ASX debut doesn't look to be on the cards.
