The voluntary administrators of Sun Cable, the owners of what would be the world’s biggest solar and storage project, have held their first meeting of creditors as they prepare the company for sale, and likely competing offers from billionaires Andrew Forrest and Mike Cannon-Brookes.
The meeting was held on Friday – virtually – with representatives from Forrest and Cannon-Brookes attending along with other creditors, and sought funds to allow the company to continue business while its future is decided.
Sun Cable was backed by both Forrest and Cannon-Brookes, with plans to build up to 20GW of solar capacity and upon to 42GWh of battery storage, along with high voltage cables to Darwin and a 4,200km sub-sea link to Singapore.
But the two billionaires, who rank as both Australia’s two richest men and the country’s most vocal green energy supporters, fell out over the export component.
Forrest’s team argued it makes no commercial sense, and want the project to focus on the domestic market, including green industry and the production of green hydrogen and green ammonia. The Cannon-Brookes team disagrees, and believe the project can meet both objectives.
Both have indicated they are likely to be bidders for the business when the sale process begins at the end of the month. And other big players – such as Iberdrola and Macquarie – may be too, either separately or aligned with one of the two main parties.
The legacy energy industry, and its choristers, have been quick to seize on the Sun Cable administration as proof that renewables, and such big projects in particular, do not make sense.
But this is a clash of business plans, and probably egos, rather than a failure of technology. The reality is that the scale of such ventures is simply frightening to many of those attached to fossil fuel generation.
John Park, the head of corporate finance and restructuring in Australia for FTI Consulting, said there is a “strong level of interest” in Sun Cable, which had been demonstrated by the amount of media coverage and commentary made by stakeholders.
“As Administrators we have looked to preserve the value of Sun Cable and keep all options for the future of the project on the table,” Park said in a statement.
“We will seek to crystalise the interest expressed in the future of Sun Cable into a firm offer for the benefit of creditors and other stakeholders via the sale process.
“Ultimately, the successful bidder will have the opportunity to take the business forward in line with their vision.”
It is not clear how much funding was sought, or who provided it. In its statement, FTI said it provided each interested party with equal opportunity to participate.
“The Administrators notified the relevant stakeholders of their decision and are taking steps to finalise and execute a funding agreement which is anticipated to occur in the coming days.”
FTI is also seeking proposals from advisors to act on the sale and run the sale process. An appointment is expected shortly and the sale could be completed within three months.
A second meeting of creditors would normally be schedule to be held on or before February 14, but could be delayed pending the sale process.
