AGL Energy a capital raising candidate: JPM

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AGL Energy could soon be making a trip to the capital markets, as its coal demerger looms and the share price recovers.

, at one point falling to its 17-year-low. .

“...given the recent strength in the stock price and continued focus on the balance sheet post-demerger, the company may take the opportunity to raise equity,” JPMorgan analysts led by Mark Busuttil said in the note sent to clients on Friday.The trio said a $500 million raising at February 4 share prices would be 1 per cent dilutive while a $1 billion raising would be 3 per cent dilutive.in May last year and hinted at asset sales, as wholesale power prices tumbled.

JPMorgan analysts said AGL could upgrade full-year guidance of $220 to $340 million NPAT because then , average forward prices have risen 36 per cent.“While AGL typically forward sells most of its electricity generation ahead of the fiscal year, there is the possibility of an upgrade to guidance based on: any portion of generation that may be unhedged; mark-to-market of derivative contracts; and/or generation from Loy Yang A given Victoria resets residential prices in January ,” they said.

co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies.

 

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