Origin in the hunt for CEO Grant King’s successor

DataRoom

Hot on the heels of the departure of its finance chief Karen Moses, it is understood that Origin Energy has now turned its focus to a replacement for chief executive Grant King, with Frank Calabria and David Baldwin said to be the two internal candidates earmarked for the position by the board.

David Baldwin is Origin’s chief executive, integrated gas, who oversees the company’s Australia Pacific LNG operation, while Frank Calabria is Origin’s chief financial officer, having joined the business in 2001, and currently chairs the Australian Energy Council.

The company’s chief Grant King was previously tipped to step down around August, once APLNG was up and running, with the company hiring executive search firm Russell Reynolds.

While the timing of King’s exit has not been certain, it was widely tipped late last year that he would like to stay until his APLNG plant moved into its second train, around June.

However, the latter part of this year is said to be the likely time to hand over the reins, with the successor to be announced in advance.

It is understood while Calabria and Baldwin are the front runners of the internal candidates for the job, the company continues to also run an external search.

Of the pair, some believe that Calabria is the more favoured candidate, given that he has a greater credibility with investors.

Another possibility is that Origin Energy appoints an interim CEO before announcing the final choice.

It comes as Origin embarks on asset sales, announcing on Friday that it had agreed to divest the SEA (Mortlake) Partnership for $245m cash.

Mortlake Pipeline, which is currently operated by a related party of SEA Gas Mortlake, supplies gas to Origin’s Mortlake Power Station in Victoria. Origin has secured long-term gas transportation and storage services on the pipeline.

The planned sale price would equate to 14.4 times forecasted earnings before interest, tax, depreciation and amortisation for the 2017 financial year.

Origin’s has previously said that it intended to generate at least $800m through asset sales, including non-operated upstream interests and other infrastructure assets.

So far, the company will have reaped $396m to pay down debt from the latest sale and the divestment of its Mortlake Terminal Station and 50 per cent interest in OTP Geothermal.

Origin’s bankers Macquarie Capital had previously been working on a demerger of the company, but it is understood that deal has now been suspended until next year.