Origin Energy to raise $2.5b equity to ease pressure on balance sheet

Angela Macdonald-Smith and Perry Williams

Updated Sep 30, 2015 – 6.36pm, first published at 8.41am

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Origin Energy has dropped its resistance to a capital raising, moving to sell $2.5 billion in new equity in response to markets increasingly panicky about resource sector debt levels while key commodities face a prolonged price slump.

The fully underwritten entitlement issue is part of a $4.7 billion package of measures by the energy supplier intended to shore up its balance sheet and avoid its credit rating falling to junk status. The package includes up to $800 million in asset sales, $1 billion in spending cuts and a 40 per cent cut in dividends over the next two years.

Angela Macdonald-Smith writes on the resources industry with a focus on energy, including gas, oil, electricity and renewables.

Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies.