AGL Energy Limited (AGL):
Former BHP Billiton iron ore head Graeme Hunt is to take the chairman role at AGL Energy just as the major utility is trying to fend off a ‘‘second strike’’ over executive pay. Mr Hunt will replace Jerry Maycock who will retire at the next annual shareholder meeting as flagged at the last shareholder meeting in September. A nonexecutive director of AGL for almost five years, the former chief executive of Broad spectrum and Lihir Gold will be stepping into the role at a time when AGL is also riding high on the soaring wholesale power price, which has helped drive its shares to record levels.
AGL Energy chief executive Andy Vesey and other power bosses have said the economics of investing in new coal plants don’t add up compared with wind and solar power. Speaking a day after Prime Minister Malcolm Turnbull said the federal government could invest in new coal plants to shore up supply, Mr Vesey said he had examined the numbers and could not commit AGL’s capital to coal plants. He believed the energy security plan outlined by Chief Scientist Alan Finkel was ‘‘comprehensive’’ and should be backed, and joked that as soon as you think you’re up to date with energy policy ‘‘a flash on your phone’’ changed everything again.
Amp Limited （AMP）:
Financial services giant AMP is edging closer to another reinsurance deal which may release $300 million to $500 million in capital, sources told Street Talk. This column understands AMP is in live negotiations to reinsure another tranche of its $2 billion life book, following a deal announced in the latter half of last year with Munich Re. Interestingly, this time round AMP’s joint venture partner, China Life, is said to be in talks to provide the reinsurance, along with other parties including Munich Re and the likes of Hannover Re.
Fairfax Media Limited （FXJ）:
It’s three weeks into Fairfax Media due diligence, and some key stakeholders are getting nervous. While would-be buyers TPG and Hellman & Friedman crunch through historical and forecast numbers to come up with binding bids, it’s their lined-up lenders that are having pause for thought. Sources close to the lenders told Street Talk there were some awkward conversations to be had with the private equity buyers. While the lenders talked a big game to get into the data room with the respective tyre kickers, some are trying to back out of their original commitment sizes.
Origin Energy Limited (ORG); Santos Limited (STO):
Shell and Origin Energy’s LNG projects in Queensland have more than enough spare gas to supply the east coast market, but will only do so if returns from domestic sales are better than from spot LNG sales, according to UBS energy analyst Nik Burns. The ability for Shell’s QCLNG project and Origin’s APLNG venture to divert gas from LNG export to the domestic market means no shortage is likely to develop, although local gas prices may be higher than some manufacturers can afford, Mr Burns said on Tuesday. ‘‘There is no shortage of gas on the east coast of Australia, but there is a shortage of cheap gas,’’ he said. The UBS analysis comes just ahead of the introduction of the government’s controversial ‘‘domestic gas security mechanism’’, which could cap LNG exports if it is triggered. But ironically the design of the mechanism means it would affect only Santos’ GLNG venture, rather than the two Queensland LNG projects that have extra gas to sell.
QBE Insurance Group Limited (QBE):
A shock earnings downgrade from insurer QBE has revived worries about management forecasts and what other problems might emerge at the group. QBE’s warning of higher-than expected claims in its emerging markets division saw investors wipe $1.9 billion off the insurer’s market value, with the stock closing down 10.3 per cent at $11.87. The warning came just a month after the insurer confirmed its 2017 guidance at its annual general meeting, where it also failed to warn of any problems in its emerging markets business.
Westpac Banking Corporation (WBC):
Westpac Banking Corp has told staff its chief customer officer – and former Walt Disney executive – Tom Boyles is retiring from the bank. As revealed by Street Talk, Boyles’ retirement was announced among a number of executive changes at Westpac yesterday. They included luring two senior staff members from rival banks. Westpac CEO Brian Hartzer is said to have told staff Boyles ‘‘challenged our thinking’’ and was a ‘‘passionate advocate’’ for the bank. Boyles will continue to work on digital and data projects at Westpac until the end of 2017 before returning to the US.
(Source: AIMS)
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