Australia's top power producer and energy retailer AGL Energy said on Tuesday it would split itself into two separate businesses, following a review of its business model as the company contends with growing challenges.
The move to split the company comes after a 35% slump in its shares over the past year, making AGL the third worst performer among Australia's top 200 companies.
AGL has been weighing how to reshape itself as it faces ever growing challenges, with an influx of wind and solar power hammering its energy market earnings faster than expected, driving down wholesale power prices.
The first company, dubbed New AGL, would be a multi-product energy retailer delivering electricity, gas, internet and mobile services, and would have a carbon neutral focus, the company said in an investor day presentation.
The second, PrimeCo, would focus on electricity generation, supplying the National Electricity Market, New AGL, other retailers, aluminium smelters, and wholesale and industrial power users.
AGL also said it had identified A$400 million ($305.24 million) worth of assets to divest and had started the sales process for two - its Newcastle gas storage facility and Silver Springs gas project - which it expects to sell in fiscal 2022.
($1 = 1.3104 Australian dollars)
(Reporting by Rashmi Ashok in Bengaluru; Editing by Anil D'Silva)
