Origin Energy capital raising

Origin Energy today announced a 4 for 7 fully underwritten pro rata renounceable entitlement offer priced at $4.00 per new share. It intends to use the $2.5 billion raised to immediately reduce debt. Today's announcement also indicates Origin Energy will embark on $2.2 billion of targeted cash preservation initiatives. These initiatives include dividend guidance for FY2016 and FY2017, a further $1 billion reduction in capital expenditure and working capital across FY2016 and FY2017, plus a target of $800 million in asset sales by FY2017. Its underlying EBITDA guidance for FY2016 and FY2017 should also be noted. From a remuneration perspective, Origin Energy is a nice illustration of when the STI scheme is mismatched with the time horizon of its investment cycle and earnings from these investments. Its 2015 AGM is on Wednesday 21 October 2015