Alinta loses executive and value

The shock resignation of Alinta power broker David Franklyn has done little to support the company's sliding market value with shares dropping another 23 cents to $6.02 at the time of printing, down from $7.66 before the Duke buy-out was announced.

Franklyn reportedly walked out of the energy utility last week over a valuation dispute concerning the company's successful $1.69 billion Duke Energy bid. Despite Alinta's protestations at the time that he was on a two week break chief executive Bob Browning finally admitted to the West Australian newspaper Franklyn would not be returning to the company fold.

While Franklyn's official title was general manager of corporate communications, he was also part of Browning's leadership team that considered major transactions like the Duke purchase.

Franklyn's departure has come at a bad time for Alinta as the company prepares a prospectus in the market to raise $468 million from shareholders in a three-for-seven rights issue pitched at $5.50 a share, part of its package of fund raising ideas to pay for the Duke assets.

Institutional investors who took stock at $6.75 last week in a separate $198 million Macquarie Bank book-build are already counting the cost after shares dropped 20% since the deal was announced.

Franklyn's decision to leave has apparently shocked the board as his original estimate on the value of Duke's assets was not far off the final bid price. Browning has emphasised that Franklyn's decision to leave was entirely his own although so far he has refused to comment.


Most read MARKETS