The power station delivers base load electricity into the National Electricity Market (NEM) through two 420 megawatt supercritical, pulverised coal-fired generation units providing a significant percentage of Queensland’s electricity supply.
The company’s operations and profitability were adversely impacted by a dispute with the owner of the adjacent coal mine which was the only commercially viable fuel source for the power station.
At the same time, several independent issues were increasing pressure on the feasibility of the project, complicating stakeholders’ risk profiles:
Wholesale electricity prices were generally low;
The market operator (AEMO) was forecasting declining electricity demand placing downward pressure on the company’s revenues;
The coal mine was in the process of being sold to a newly incorporated and largely unproven miner increasing uncertainty over coal supply;
Debt facilities were due to expire with the company and the banking syndicate harbouring divergent views on appropriate terms moving forward.
Acting as restructuring advisors on behalf of a diverse banking syndicate with a debt exposure of c$300 million to the project, we were responsible for daily electricity trading and operational oversight of the power station and as such were quick to identify the relevant stakeholders and the extent of their interests in the project.
Adopting a tailored dialogue with these wide-ranging stakeholder groups allowed us to maintain strong engagement throughout the turnaround. Importantly, key characteristics which all successful turnaround leaders exhibit when communicating with stakeholders are:
Over a three-year period, our effective management of multiple stakeholder groups encouraged strong engagement levels and allowed for the full retirement of the banking syndicate’s debt exposure and return of control of the power station to the shareholders.
There are seven critical rules1 which turnaround leaders apply when managing stakeholders. In our experience there is no ‘one size fits all’ approach to stakeholder management but the one non-negotiable quality in which all successful turnaround leaders excel is communication.
1 Critical rules adapted from “Leading Corporate Turnaround’, Stuart Slatter, David Lovett and Laura Barlow.
We frequently work with corporates to assist management teams navigate uncertainty – we can make the difference to how your business preserves, creates and delivers value in times of crisis.
Our experienced team knows that a successful turnaround must address the fundamental problems, tackle the underlying causes and be broad and deep enough to resolve all key business issues within each phase of a turnaround.
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Partner, Azurium, Melbourne
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