Sun Cable project up in smoke
Backers’ scrap leads to collapse
A FALLING-OUT between two of the nation’s richest men has led to the abrupt implosion of the $30bn Sun Cable solar and battery project in the Northern Territory.
Sun Cable was placed into administration on Wednesday after a dramatic scrap between its two high-profile backers – Mike CannonBrookes and Andrew Forrest.
As one of the world’s biggest solar and battery projects, Sun Cable was set to turbocharge Australia into a major international clean energy exporter.
Its collapse now sets the scene for the business titans to compete for control of the giant renewable development, known as the AustraliaAsia PowerLink. The two billionaires are understood to have clashed over different views on the optimal funding package and strategic vision for the project.
The project’s ambitious goal was to send power from Darwin to Singapore via a 4200km electricity cable. FTI Consulting was formally appointed as voluntary administrator of Sun Cable on Wednesday.
“The appointment followed the absence of alignment with the objectives of all shareholders,” Sun Cable said. “Whilst funding proposals were provided, consensus on the future direction and funding structure of the company could not be achieved.”
Sun Cable in March 2022 raised $210m of new funding to push ahead with its signature clean energy scheme – the $30bn Australia-Asia PowerLink development – with fresh funds ploughed in by the Atlassian co-founder Mr Cannon-Brookes and the Fortescue Metals chairman Dr Forrest. However, Dr Forrest’s Squadron Energy is understood to have raised concern that Sun Cable failed to meet its series B funding milestones and was “burning cash” at unsustainable rates. The project is understood to be running up to 12 months behind schedule.
As part of ongoing funding needs for the development, Mr Cannon-Brookes’ Grok Ventures was planning to invest an extra $60m into Sun Cable, but that proposal was not agreed to by Squadron, sources said.
Squadron, for its part, held concerns over a clause within Grok’s funding proposal that would have seen the company sold or put on the market if there were further failures by the company to meet its funding milestones. Squadron also put forward a funding proposal for a similar amount, but it was not accepted by the rest of the board. Both Grok and Squadron held veto rights which effectively cancelled each other’s funding deals.
Grok said there was little choice for the company than the move into administration. “In the circumstances, including where all but one shareholder agreed with the company’s funding strategy – the board was left with no other option, but to enter into voluntary administration,” Grok said in a statement. “We are confident Sun Cable will be an attractive investment proposition and remain at the forefront of Australia’s energy transition.”