AGL Energy may have to raise more than half a billion dollars in equity, or even sell part of its retail business, to carry out its planned demerger as wholesale power prices fall through the floor, analysts have warned.

Shares in AGL – which is still reeling from the shock departure of former chief executive Brett Redman in April – hit a 17-year low last week, as UBS analysts suggested about $600 million of fresh equity could be required for both parts of the demerged business – NewAGL and PrimeCo – to hold an investment-grade credit rating.