Tech billionaire Mike Cannon-Brookes reduces his AGL stake but is committed to its transition

Mike Cannon-Brookes Ventures Grok remains AGL’s largest shareholder but he now owns 10.41 per cent of the energy company.

Tech mogul Mike Cannon-Brookes has cut his stake in AGL Energy to free-up funds to invest in climate technology and renewable energy, although he insists he is committed to remaining a key investor in Australia’s largest carbon emitter.

In a letter to AGL, Jeremy Kwong-Law, the chief executive of the billionaire’s private company, Grok Ventures, said Mr Cannon-Brookes saw AGL as a priority investment but had rebalanced its portfolio to allow new investments.

“As a prudent and disciplined investment company, we have decided to rebalance our portfolio to enable us to pursue other exciting climate technology and renewable energy investments,” Mr Kwong-Law said in a letter to AGL and released to the Australian Securities Exchange.

“This small sale of shares should not be seen as a broader divestment plan or change in our focus.”

Grok remains AGL’s largest shareholder but he now owns 10.41 per cent of the energy company.

Grok sold just over 5.8 million shares in April. The first tranche of sales sold for $8.20 each and the second at $8.28 each.

Despite trimming his stake, Mr Cannon-Brookes would continue as an influential shareholder and Grok said it intended to maintain its pressure on AGL.

“We continue to implore AGL to increase its decarbonisation ambitions. In particular, firm up closure dates for Bayswater and Loy Yang A which are consistent with a 1.5 degree,” Mr Kwong-Law said.

Mr Cannon-Brookes has led a vocal campaign for AGL to exit coal quickly, and the 185-year-old company last year said it would close its coal-fired Loy Yang A power station in Victoria in 2035, having previously said it would retire the generator in 2045.

AGL, however, left unchanged its plan to shut its Bayswater black coal-fired power station in New South Wales’ Hunter Valley between 2030 and 2033.

AGL chair Patricia McKenzie has said the plan is “responsible and appropriate” to deliver upon the Paris Agreement target and AGL would consider accelerating its exit from coal if the transition occurs more quickly or should there be opportunity present itself.

While Mr Cannon-Brookes is pushing to accelerate the retirement of Australian coal-fired power stations, there is a growing chorus of prominent energy executives who have said the country should consider delaying the exit of some large generators until there is ample confidence that Australia has sufficient supply of renewables to compensate.

Still, Mr Cannon-Brookes has proven to have a significant influence on AGL. Despite having a takeover approach rejected, Mr Cannon-Brookes succeeded in securing enough shareholder support to scupper AGL’s plan to split the company in two, which ultimately triggered the departures of several key executives. He then used his sway to lead an overhaul of the board last September.

The fortunes of AGL have increased markedly over the past 12 months, and it last week said it now expected to post its biggest annual profit in three years in 2024.

The outlook is expected to fund both lucrative returns to shareholders and facilitate its transition away from fossil fuels, but is also likely to intensify public anger about the profits of electricity and gas retailers at a time when Australia is experiencing a cost-of-living squeeze.