Cannon-Brookes to acquire Sun Cable

Billionaire Mike Cannon-Brookes is set to acquire collapsed business Sun Cable, proposing to continue a $35 billion renewable energy project, despite previous interest from former project partner Andrew Forrest.

FTI Consulting was appointed as voluntary administrators of Sun Cable Pty Ltd in January.

Mr Forrest’s private company, Squadron Energy, and Mr Cannon-Brookes’ Grok Ventures invested in Sun Cable in 2019, becoming the two major shareholders.

Business News previously reported that both companies submitted new funding proposals before Christmas but could not reach agreement.

FTI Consulting today confirmed Sun Cable had entered into an asset sale agreement with Helietta Holdings 1 Pty Ltd, a consortium affiliated with Grok Ventures.

The buyer would acquire substantially all of Sun Cable’s assets, including the shares in all of its subsidiaries.

Mr Cannon-Brookes said the agreement was a step in the right direction.

"We've always believed in the possibilities Sun Cable presents in exporting our boundless sunshine, and what it could mean for Australia," he said.

"It's time to stretch our country's ambition. We need to take big swings if we are going to be a renewable energy superpower. So swing we will.”

Sun Cable’s core project involves construction of the Australia-Asia power link, giant solar farm in northern Australia to supply power to the Northern Territory and Singapore.

FTI said Helietta Holdings intended to continue the project to progress to a final investment decision.

The first stage is expected to deliver 0.9 gigawatts of power generation to Darwin and 1.8GW into Singapore.

“The administrators will work with the buyer to facilitate ongoing development of AAPowerLink in the period up to completion,” FTI said in a statement.

Mr Forrest congratulated Mr Cannon-Brookes on the confirmation of the Sun Cable sale agreement.

“While Squadron Energy did not participate in the final binding bid process for Sun Cable, we are delighted that other investors like Grok are playing a role in tackling global warming, by replacing fossil fuel investment with green energy projects," Mr Forrest said.

“Squadron decided the capital allocation did not align with Squadron’s strategic goals, as we are already working to deliver 30 per cent of the renewable energy required to meet the federal government’s target of 82 per cent renewables by 2030 and want to bring new green electrons into the grid as soon as possible.

“We have decided to focus on the existing 20GW pipeline of assets as a much faster way to achieve those goals and take Australia closer to a carbon-free future.

“We remain unconvinced of the commercial viability of the Australia-Asia Powerlink but if others believe it can be achieved, we wish them all the best.

“As an interested shareholder we look forward to better understanding the details of the deal.”

Quinbrook Infrastructure Partners is a partner of the Grok-led consortium that won the Sun Cable bid.

Its co-founder and managing partner, David Scaysbrook, said Quinbrook was pleased to have supported Grok in the acquisition.

"With construction well underway on the largest solar+storage projects ever undertaken in the US and the UK, it is well positioned to assist Grok to complete the development of what promises to be not only one of the largest renewables projects in Australia, but a project of global significance," he said.

"Quinbrook will focus on delivering on the opportunity afforded by northern Australia’s abundant solar and wind energy resources and showcasing the important and complementary role that the world's most advanced storage technologies can offer in supplying energy intensive industry with reliable and competitively priced, carbon free power solutions."

According to the FTI statement, the transaction is expected to be completed by the end of July 2023.

“Based on the pre-administration claims that are outstanding, the transaction is expected to allow for unsecured creditors of Sun Cable to be paid in full,” FTI said.