One of the world’s biggest renewable energy projects has been placed into voluntary administration after Australian mining magnate Andrew Forrest clashed with tech billionaire Mike Cannon-Brookes over the terms of a new funding round.
Forrest’s Squadron Energy chose not to support the recapitalization plan because of concerns related to the cost of the project and its future direction, according to two people with direct knowledge of the talks. Both billionaires have veto power.
Sun Cable needs new funding to continue operations. It went into voluntary administration as shareholders could not agree on a new funding structure. FTI Consulting has been appointed to lead the sale or recapitalization of the company.
Sun Cable had appointed bankers last year to raise A$30bn ($21bn) over the next 18 months to fund solar projects in northern Australia, seen as a test of the country’s ability to transition from an economy dependent on fossil fuels to a clean energy exporter.
Squadron Energy and Grok Ventures, the investment vehicle of Atlassian founder Cannon-Brookes, led a $210 million fundraising in March last year.
Talks about the next round of funding for Sun Cable have been ongoing since the project began missing milestones, according to people with direct knowledge of the situation.
A disagreement about the future direction of the business between the two billionaires – who both hold 15 percent of the shares – emerged as more delays for the project appeared on the horizon, added the person.
Cannon-Brookes, who is chairman of Sun Cable, said through Grok that he had been impressed with the “management of progress” in the business. He offered to provide additional investment to the project.
“In the circumstances, including where all shareholders agree to the company’s funding strategy, the board has no choice but to enter voluntary administration,” he said.
He said the move gave him the best chance of accessing suitable sources of funding.
“We are confident that Sun Cable will be an attractive investment proposition and remain at the forefront of Australia’s energy transition,” he said.
Forrest, who founded iron ore business Fortescue, declined to comment.
Squadron Energy became Australia’s largest renewable energy company in December when it paid A$2.7bn for wind farm business CWP Renewables. Squadron has yet to reject an offer for Sun Cable currently in administration.
Sun Cable plans to build approximately 20 gigawatts of solar capacity and 40GWh of battery storage in Australia as well as a 4,200 kilometer undersea cable to pipe energy to Singapore.
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