ZEN departs SIMEC Energy

SELLING: GFG Alliance Chairman Sanjeev Gupta.
SELLING: GFG Alliance Chairman Sanjeev Gupta.

GFG Alliance Executive Chairman Sanjeev Gupta has sold a portion of his business three years after obtaining it as the company moves into a new era.

ZEN Energy announced a successful 'de-merger' of SIMEC ZEN Energy into SIMEC Energy Australia and ZEN Energy on Tuesday.

SIMEC Energy Australia will continue to be owned by GFG Alliance while ZEN Energy will exit the alliance and will be wholly owned by Professor Ross Garnaut and his business partner Raymond Spencer.

Mr Gupta, who owns the Whyalla Steelworks, purchased a majority stake in the company in 2017, which was one of his first key investments in Australia.

In a statement, GFG Alliance confirmed that the sale of ZEN Energy would not affect the company's Cultana Solar Farm project, which is being undertaken by SIMEC Energy Australia and is expected to begin construction in the final quarter of 2020.

However a GFG spokesperson declined to comment on how much Mr Gupta's stake in ZEN Energy was sold for.

Mr Gupta said the separation would 'allow both businesses to independently execute their strategies, while exploring more effective capital structures and attract investors'.

"Ross has been both a mentor and friend since I came to Australia and has a deep understanding of the transforming energy space so I am particularly pleased that he will continue to provide valuable industry insights and counsel to GFG as we develop our energy strategy," he said.

"South Australia is uniquely positioned to lead Australia through the inevitable transition to renewables so I am confident both SIMEC Energy Australia and Zen Energy have a very bright future."

Professor Garnaut said the new structure of the company would allow ZEN Energy to accelerate progress on lowering electricity costs through the use of renewable energy.

"We now have the structure in place to deliver integrated energy solutions, combining onsite, sustainable, energy hardware with renewables-backed energy supply contracts," he said.

"Under the leadership of Sanjeev Gupta over the last two and a half years, the team at ZEN Energy has continued to develop the strength of this business.

"We look forward to continuing to contribute to lowering the cost and improving the security and stability of South Australia's power supply."