AGL Energy to become Accel Energy and demerge AGL Australia

AGL to proceed with demerger to create two separately listed leading energy companies.

Shaping forces of customer, community and technology continue to affirm our decision to demerge

Separation follows demerger logic to deliver clarity of focus

  • Name changes

    AGL Energy Limited plans to change its name to Accel Energy Limited and demerge AGL Australia Limited as a separately listed entity via capital reduction.

  • Shares

    Current AGL Energy holders will retain one share in Accel Energy and receive one share in AGL Australia for every share they own on the applicable record date.

  • Shareholder vote

    Shareholders will have the opportunity to vote on the demerger.

  • Shareholding

    Accel Energy to hold a 15-20% shareholding in AGL Australia to enable it to share in value creation, with no associated board position.

  • Capital structures

    AGL has received strong endorsement for independent capital structures from its lenders for both entities. These capital structures are anticipated to be investment grade.

  • Completion

    Anticipated completion of demerger in fourth quarter of FY22, subject to final board, regulatory and shareholder approvals.

Side by side comparison of Accel Energy and AGL overlaid on maps of Australia. Accel Energy has power stations, gas projects and storage, wind farms and batteries. AGL has hydro, solar and gas-fired power stations, gas storage, wind farms and batteries.

Accel Energy is Australia's largest electricity generator

Energy supplier

at scale to major electricity users: supplying 20% of the national electricity market, with 33.5TWh (FY23) electricity generation and ~8GW name-plate thermal capacity.

Development pipeline

focused on energy low-carbon industrial hubs, with a ~1 GW wind farm portfolio and 1600MW wind development portfolio.

Decarbonisation targets

commitment to show clear progress on existing trajectory, and over 16,000 hectares of land for energy hubs.

AGL is Australia's largest multi-product retailer

Strong, stable and growing

base connected to 30% of Australian households, with 4.5m1 services to customers, 24.3TWh2 customer electricity volume and 140PJ2 customer gas volume.

Leading energy trader

backed by a portfolio of flexible generation and storage assets, including 1.3GW of flexible electricity generation and storage.

Carbon neutral

for scope 1 and 2 emissions, with a clear pathway to full carbon neutrality for electricity supply.

1 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.
2 Forecast numbers as at FY23, subject to change.

AGL Energy is targeting completion of the demerger by fourth quarter of FY22

Stage 1 - Complete

  • Confirm strategy and structure
  • Asset allocation finalised
  • Confirm capital structures and receipt of banking commitments
  • Appoint CEO-elect and Chair-elect of AGL Australia and Accel Energy

Stage 2 - Current 

  • FY21 results
  • Progress boards and management teams for AGL Australia and Accel Energy
  • Annual General Meeting
  • Tax and regulatory processes progressed
  • Detailed plans for separation actioned to achieve two fully functioning internal teams by the implementation date

Stage 3

  • HY22 results
  • Scheme documents issued to shareholders
  • Shareholder meetings to vote on the demerger proposal
  • All relevant approvals obtained
  • Demerger implemented

FAQs

a. AGL Energy Limited (“AGL Energy”) has confirmed its intention to undertake a demerger to create two leading energy businesses, both separately listed on the Australian Securities Exchange.

Under the demerger proposal:

i. The existing AGL Energy business will be become Accel Energy Limited (“Accel Energy”) – Australia’s largest baseload electricity supplier, focused on the accelerating energy transition.

ii. Accel Energy will then demerge a new entity, AGL Australia Limited (“AGL Australia”) – Australia’s largest multi-product energy-led retailer, leading the transition to a low carbon future.

b. Please note the proposed demerger is subject to final Board, ATO and relevant regulatory, court and shareholder approvals.

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

b. The proposed demerger is still subject to final Board, ATO and relevant regulatory, court and shareholder approvals.

c. If the demerger is undertaken, upon completion AGL Energy shareholders will hold one share in “Accel Energy” (being their renamed AGL Energy share) and one share in “AGL Australia,” for every share they own in AGL Energy on the applicable record date. 

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

i. Accel Energy would focus on the transition of its existing electricity generation assets and investment in the long-term rejuvenation of its valuable power station sites as well as new clean energy projects.

ii. AGL Australia would focus on being Australia’s largest multi-product energy-led retailing business, while investing in flexible and decentralised energy trading, storage and supply services.

b. A demerger would also enable each business 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. A demerger would also allow investors to have greater transparency in valuing each business and choosing the sort of exposure they wish to have.

a. There is no action you need to take at this time.

b. The proposed demerger is still subject to final Board approval (as well as ATO and relevant regulatory, court and shareholder approvals) – If the AGL Energy Board decides to proceed with the demerger, a scheme booklet containing detailed information about the demerger is expected to be sent to shareholders to enable shareholder meetings to consider and vote on the demerger in the fourth quarter of FY22. If approved, the demerger is expected to be implemented by the end of FY22. 

If AGL decides to undertake the demerger, and provided all the relevant regulatory, court and shareholder approvals have been received, it is expected that it will complete during the fourth quarter of FY22, although this may change subject to the nature of demerger and the pace at which it can be executed.

a. The expectations surrounding climate action have increased materially and this is one of the key drivers for AGL’s consideration to pursue a demerger. AGL sees the demerger 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.

AGL Australia would be carbon neutral for scope one and two emissions following the demerger, 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.

Accel Energy’s 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 while alternative sources of energy storage and supply are fully developed. In the nearer term, Accel Energy 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 in the demerger scheme documents.

AGL will provide additional updates on the proposed demerger during the FY21 results announcement on 12 August 2021, and during the Annual General Meeting on 22 September 2021.

We will continue to update the investor section of our website with any new information and you can view the presentations we provided to market both on 30 March 2021 (PDF) and 30 June 2021 (PDF).

Disclaimer and important information

The material on this website is general information about AGL's activities as at the date of this presentation. It is provided in summary form and does not purport to be complete. It should be read in conjunction with AGL's periodic reporting and other announcements lodged with the Australian Securities Exchange.

This presentation is not an offer or recommendation to purchase or subscribe for securities in AGL Energy Limited or to retain any securities currently held. It does not take into account the potential and current individual investment objectives or the financial situation of investors.

Before making or varying any investment in securities in AGL Energy Limited, all investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation and should seek their own independent professional advice.

This presentation includes certain forward-looking statements that are based on information and assumptions known to date and are subject to various risks, uncertainties and change. Actual results may materially vary from any forecasts in this presentation. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Future major expenditure, projects and proposals remain subject to standard Board approval processes.

The material in this presentation provides an indicative outline of AGL's plans to undertake a demerger. 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 estimates, unaudited and may not add due to rounding. In addition, they are not represented as being indicative of any future financial conditions or performance.