AGL plans to create two leading energy businesses focused on executing distinct strategies.

Both businesses would be established as category leaders which could play a crucial role in the energy transition.

New AGL
New AGL

Australia’s largest multi-product energy retailer

 

  • 4.5 million services to customers*
  • 24 TWh customer electricity demand
  • 74 PJ customer gas demand
PrimeCo
PrimeCo

Australia’s largest electricity generator

 

  • 8.9 GW installed capacity
  • 40 TWh generated per annum
  • 7.7 GW infrastructure connection
AGL plans to create two leading energy businesses focused on executing distinct strategies. Both businesses will be established as category leaders which can play a crucial role in the energy transition.

What this means for

What this means for our shareholders, customers and communities.

The creation of these new businesses would build on AGL’s 180 year history of evolving and innovating as a leader in Australia’s energy sector.

We are committed to ongoing engagement to deliver the optimal outcome for AGL shareholders.

Timeline

Note: the material in this presentation provides an indicative outline of AGL’s proposed separation plans. These plans are subject to a number of conditions and requirements and therefore are subject to change. The numerical estimates set out in this presentation are provided for illustrative purposes only and are not represented as being indicative of any future financial conditions or performance. The company names “New AGL” and “PrimeCo” are project names and the icons and logos have been created for the purpose of illustration only.

*Services to customers number is as at 31 December 2020 and includes Click Energy and 100% of approximately 300,000 services to customers of ActewAGL, in which AGL owns a 50% equity stake of the retail operations.

FAQs

What does the plan for a “structural separation” as announced by AGL on 30 March 2021 involve?

a. The “structural separation” refers to the proposal to create two leading energy businesses focused on executing distinct strategies, being:

i.“New AGL*” Australia’s largest multi-product energy retailer, leading the transition to a low carbon future; and

ii. “PrimeCo*” Australia’s largest electricity generator, supporting the Australian economy as the energy market evolves.

b. A formal decision to proceed has not yet been made, but we are targeting a “demerger” style transaction under which the AGL of today would become two separately listed companies.

 
What is the current stage of the proposed structural separation?

a. AGL is currently engaging with investors, regulators, government and workforce stakeholders and undertaking due diligence on the proposal.

b. A formal decision to proceed has not yet been made, but we are targeting a “demerger” style transaction under which the AGL of today would become two separately listed companies.

c. AGL is progressing its consideration of the proposed structural separation and intends to provide the market with more details by 30 June 2021.

 
What does a structural separation of AGL mean for my AGL shares?

a. At this stage, there is no change to the AGL shares you hold, AGL’s dividend policy or the company AGL Energy Limited in which you have a shareholding.

b. If AGL decides to proceed, any demerger would be subject to shareholder approval, subject to which, each AGL shareholder would hold shares in the two separate companies proportionate to their AGL holding at the time of the separation. 

 
What are the benefits of structural separation to AGL shareholders?

a. Separation of AGL into two distinct organisations will enable each business to set and execute its own strategy at a time of great change in the energy industry.

b. A structural separation would also enable each to address market forces in a tailored and focused manner and advocate for their respective roles in the transition of the energy market to a low carbon future.

c. Separation would also allow investors to have greater transparency in valuing each business and choosing the sort of exposure they wish to have.

d. A decision to proceed with a separation has not been made at this stage but the AGL Board will only proceed if it concludes that to do so would be in the best interests of shareholders. 

 
How would a separation impact AGL’s climate goals and energy transition?

a. The expectations surrounding climate action have increased materially and that is one of the key drivers for AGL’s consideration to pursue the separation. AGL sees a separation as a mechanism to allow both leading businesses to focus on their different but important roles within Australia’s energy transition to a low carbon future.

New AGL* would be carbon neutral for scope one and two emissions on Day 1 following a formal separation, offsetting the emissions it generates directly with high quality accredited instruments. It would have a clear pathway to full carbon neutrality for all its sourced energy over time via its support for renewables development and further offsets. It would build on AGL’s existing commitment to provide a carbon neutral option for all customer products by the end of 30 June 2021.

PrimeCo* assets are required for network stability and capacity for many years to come, while supporting reliability, affordability and the livelihoods of our people and the communities in which they work. It would continue to operate these assets safely and efficiently until they are no longer needed or commercially viable, retaining AGL’s existing commitments not to extend their life or invest in new coal power. In the nearer term, PrimeCo* would play its own role in the energy transition by developing its existing generation sites as energy hubs, operating Australia’s largest wind portfolio, and developing future wind projects.

b. AGL anticipates providing more information about the carbon transition strategies of each business at its next market update, by 30 June 2021.

 
When will I hear more information?

a. AGL is progressing its consideration of a structural separation and intends to provide the market with more details by 30 June 2021.

What do I need to do to participate in the structural separation?

a. There is no action you need to take at this time. If AGL decides to conduct the separation by way of a demerger, documentation will be provided to shareholders to consider and vote on. 

 

When will the separation be complete?

a. If AGL decides to proceed with the proposed structural separation, it is currently expected that it will complete during FY22, although this may change subject to the nature of separation and the pace at which it can be executed.

 

Where can I get more information about the proposal?

a. We will continue to update the investor section of our website with any new information https://www.agl.com.au/about-agl/investors and you can view and listen to the presentation we provided to market on 30 March and 4 May here