AGL split on track after CEO exit: Peter Botten
AGL Energy’s new chairman Peter Botten says the board was “shocked” by Brett Redman’s decision to resign as chief executive but maintains that a planned demerger is on track while rejecting speculation the board might have grown resistant to a split of the company.
The power giant immediately showed Mr Redman the door after he was reluctant to commit to an extra five-year stint leading one of the separated companies. The board decided it was inappropriate for him to remain in the CEO role for several months selling a demerger he was unable to deliver.
“I just think we were all shocked frankly. But Brett expressed his desire to leave and it was not appropriate to just have him hang around and front the transaction when we knew his medium and long-term aspirations weren’t to be part of that,” Mr Botten told The Australian.
“I think we were concerned (about) when do we announce and how do we manage the transition and I suppose between Brett and the board there was a view — although far from ideal in any circumstance — the board took a view that it was best to resolve this one now.
“So continue to engage with Brett but don’t put him in front of shareholders saying things that he might not feel comfortable saying in the event he was going to hand in his resignation in the short term.”
Former chairman Graeme Hunt was catapulted to interim chief executive, with Mr Botten tapped to lead the board.
The former Oil Search boss, who became an AGL director in 2016, said there was no animosity towards the company’s former leader.
“We certainly had assumed he would fill one of the CEO’s positions in the event there would be some form of separation in the company — but having been a CEO myself, I understand there are times when you have to make a commitment or decide not to,” Mr Botten said.
“The timing was hardly ideal for us as a company but we moved on extremely quickly. There really is no bad blood between Brett and the board and the company.”
Mr Redman’s immediate exit as head of the power giant continues to ripple through the energy industry, sparking questions about whether the board may have grown resistant to a planned split of the company championed by the former boss.
However, Mr Botten rejected the speculation and said the separation had not been disturbed by his departure. Mr Hunt is expected to reiterate that message again at a conference early next week.
“We have a very comprehensive program of analysis which is ongoing and has not been disturbed by Brett’s announcement. Graeme and CFO Damien Nicks were both on the road last week when they had a round of comprehensive meetings with investors. Obviously a focus of that was very much where the company is at with its analysis about what the next steps for the company might be — and that was a very good and constructive dialogue with those investors.”
He conceded shareholders were anxious to know further details of the restructuring, which will be finalised by June 30.
“Obviously everyone is wanting to know what the detail is of what happens next and that’s a subject of ongoing comprehensive analysis by the management team and there are advisers on key issues of tax and the mechanics of what we may or may not do, as well as obviously demonstrating to us the value proposition and the sustainability of the businesses in whatever form they take into the future,” he said.
“There is no disruption to that work and we’re on track to report back to shareholders with more detail towards the end of June. That will be the test as to what investors and shareholders think about it — at the moment we’ve just said we’re doing the work.”
The decision to put Mr Hunt in charge has been criticised both for his large pay packet but also his relatively light experience in the energy industry. However, Mr Botten said he was well-placed to continue work on the demerger.
“We felt it was appropriate to put a very steady set of hands at the wheel to see us through. Graeme is certainly stepping into a dynamic role to help steer the organisation through the deliberations that might lead to various structural changes that we’re analysing now.”
“It was really how are we going to manage the next six to eight weeks and, more importantly, how are we going to move forward with what is a very challenging environment in which to drive value.”
AGL shares, which have shed more than half their value since June, fell 0.34 per cent to $8.70.