Cannon-Brookes takes swipe at Forrest, commits to rebuilding Sun Cable

Cannon-Brookes’ affirmation of his ambitions for Sun Cable comes after questions over his desire to stay on as an investor, with sources saying Grok’s initial proposal to tip more funding into the project before its collapse included a clause that would open the door to a sale of the business if it continued to miss its milestones, suggesting Grok could have been looking for an exit.

Sun Cable is now in the hands of its administrators, FTI Consulting, who will look to achieve the best results for shareholders, which could include a sale or a recapitalisation process.

Sources said there could be a number of potential buyers or new investors, pointing to the suite of bidders who had been interested in acquiring renewables player CWP last year. Canadian pension fund CDPQ, local energy retailer Origin Energy, Future Fund-backed Tilt Renewables and major Spanish energy company Iberdrola had all made offers for CWP.

However, these bidders were gazumped by none other than Forrest’s own Squadron Energy, which succeeded in purchasing CWP in a surprise $4 billion bid, meaning the billionaire may need to buddy up with his former investing rivals if he wants to remain invested in Sun Cable.

CDPQ and Tilt declined to comment on Thursday. Iberdrola and Origin, the latter of which is in the process of being acquired by Canadian fund Brookfield, are unlikely to be interested.

Loading

Sun Cable shareholders – which include MYOB founder Craig Winkler and NextDC chief executive Craig Scroggie – will have their first creditors’ meeting for the business on January 20.

Sun Cable was founded in 2018 and planned to send solar-powered renewable energy via an undersea cable from the Northern Territory to Singapore. The operation is set to cost about $35 billion and had attracted widespread support from investors and the federal government, with Prime Minister Anthony Albanese last year labelling it an exciting project.

On Thursday, Energy and Climate Change Minister Chris Bowen said the government remained excited about Sun Cable’s potential despite the collapse.

“The government understands this is a commercial restructuring decision which doesn’t represent any lack of faith in the long-term future of the project itself,” he said.

Similarly, the business’ voluntary administration has not affected its coveted “investment ready” status from Infrastructure Australia, with a spokesperson confirming the independent body’s view of the project’s merit remained unchanged.

In its initial evaluation of Sun Cable, Infrastructure Australia highlighted the business’ private funding and $35 billion in required capital as a key risk, noting “the sheer size of the [capital expenditure] suggests that there is a high risk of delays and in finding sufficient resources”.

Sun Cable had planned to develop a 4200-kilometre underwater transmission line that would transmit solar power generated in the Northern Territory to Singapore, which could have met up to 15 per cent of Singapore’s demand.

The Northern Territory’s acting chief minister, Nicole Manison, said the local government was confident new funding sources would be found, labelling Sun Cable an important project for the territory.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.