- Sun Cable in Australia has entered voluntary administration following lack of consensus on funding proposals
- FTI Consulting has been appointed voluntary administrator for the company to help determine the future of the company
- It may either seek interested companies through an expression of interest for recapitalization or for sale of business
Sun Cable, the proponent of the world’s largest solar power project of its kind with up to 20 GW planned capacity, has decided to enter voluntary administration stating ‘absence of alignment with the objectives of all shareholders’ and the failure to achieve consensus on future direction and funding structure of the company.
In a statement, Sun Cable said, “Whilst funding proposals were provided, consensus on the future direction and funding structure of the company could not be achieved.”
Nonetheless, Mike Cannon-Brookes announced his full support to the project stating that he looks forward to supporting the company’s next chapter.
Under voluntary administration, FTI Consulting’s Christopher Hill, David McGrath and John Park will work with Sun Cable management and key stakeholders to determine the future of the company which may be determined through an expression of interest for either recapitalization or sale of the business altogether.
Sun Cable Founder and CEO David Griffin stated, “Sun Cable has made extraordinary progress in developing the AAPowerLink. This project remains well placed for completion. As we have progressed our work, the demand for delivering reliable, dispatchable 24/7 renewable energy in the Northern Territory and the region has risen materially. Sun Cable looks forward to developing and operating the projects to meet this demand.”
It is an unexpected turn of events for the colossal Australia-Asia PowerLink (AAPowerLink) project that comprises up to 42 GWh of energy storage.
AAPowerLink also holds a Major Project Status from the Northern Territory as well as the Federal Government of Australia. In June 2022, it attained investment ready status from the latter (see Investment Milestone For Sun Cable Project).
The company has already identified offtakers in the Northern Territory with around 30 GW of renewable electricity demand. Sun Cable itself is 50% over-subscribed for offtake interest in Singapore and has received letters of intent for 2.5 GW, versus planned supply of 1.75 GW, the management shared.
Local media reports speculate disagreement regarding its funding between 2 of Sun Cable’s major backers, Australian billionaires Mike Cannon-Brookes and Andrew Forrest as the reason for this voluntary administration.
Quoting undisclosed sources, The Sydney Morning Herald stated that the impasse was between the 2 billionaires as they had ‘clashing ideas on ways to prop up Sun Cable after the project missed a key milestone in September and was bleeding cash’.
Another local media outlet ABC News said the duo had disagreements about funding and direction of the company since it was spending ‘significant amounts of cash’ but wasn’t able to achieve certain milestones as required by its venture capital funding agreement.