AGL Energy’s top shareholder questions director’s promotion to chair

The logo of AGL Energy Ltd, Australia’s no.2 power retailer, adorns the building of their head office in Sydney, Australia, February 8, 2017. Picture taken February 8, 2017. REUTERS/David Gray/File Photo

MELBOURNE/BENGALURU, Sept 19 (Reuters) – AGL Energy (AGL.AX) said on Monday board member Patricia McKenzie would replace Peter Botten as chair, in the first step of an overhaul after the power producer scrapped plans to split its coal-fired generation unit from the energy retail business.

However the appointment was not welcomed by its top shareholder, tech billionaire and climate activist Mike Cannon-Brookes, who has been pushing for a complete transformation of the board and strategy at Australia’s top power producer.

AGL is set to spell out plans for a new strategy later this month after caving in to Cannon-Brookes’ push to accelerate the closure of its coal-fired plants. read more (https://reut.rs/3S3IPMz)

Cannon-Brooke’s private investment arm Grok Ventures late on Monday expressed reservations about McKenzie’s appointment and said the company would be best served by a chair appointed externally with substantial experience in renewable energy or operational transformation.

“Grok again stresses the renewed Board needs independent, fresh thinking,” Grok Ventures said in an emailed statement.

Grok did not say how it would vote on McKenzie’s appointment at the company’s annual meeting.

AGL’s shares fell 2% on Monday, underperforming a 0.3% decline in the broader market.

McKenzie is currently the chairperson of New South Wales Ports, and has also served as a director of natural gas operator APA Group (APA.AX) and a member of the council of Australian government’s National Energy Reform.

“The company has been through a period of significant change and uncertainty, and I am stepping into the Chair role to provide clear direction and stable experienced leadership as we redesign our energy portfolio and deliver the outcomes of the review of strategic direction,” she said in a statement.

The appointment comes months after Grok Ventures succeeded in forcing AGL to ditch its demerger plan in May, which led Botten and AGL Chief Executive Officer Graeme Hunt to step down. (https://reut.rs/3S3IPMz)

The Australian company said outgoing CEO Hunt will leave on on Sept. 30 and Chief Financial Officer Damien Nicks will be the interim chief executive while it picks a new chief executive from a shortlist of Australian and global candidates.

Grok welcomed Nicks’ appointment.

Reporting by Sonali Paul in Melbourne and Upasana Singh and Navya Mittal in Bengaluru; Editing by Devika Syamnath, Sherry Jacob-Phillips and Christian Schmollinger

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