The NSW Energy Minister, Mr Kim Yeadon, said the legislation provided a mechanism to constitute AGL with a modern corporate structure so it could be registered as a public company under Commonwealth legislation.

The Minister added that measures have been imposed to halt any pre-emptive attack on the AGL's register. "It's the intention of the government that no one should take financial advantage of the the corporate conversion process," Mr Yeadon said. "Improper trading of AGL shares during the conversion will not be tolerated."

AGL has been having a tough time of late due a loss-making play in the New Zealand electricity market and continuing difficulties with Dingo Blue phone company. Many in the market believe the removal of the share cap could make AGL a potential takeover target.