UPDATE 1-Australia's AGL Energy may raise equity for asset buys

* Yet to determine funding needs for NSW power privatisation

* Any equity raising to consider shareholders interests

* Sees FY2010 underlying profit rising between 3-10 pct (Adds details)

PERTH, Oct 29 - AGL Energy Ltd <AGK.AX>, Australia's No. 1 energy retailer, flagged on Thursday that it may raise equity to help buy generating assets as part of a key growth plan.

In a presentation to its annual shareholders meeting, AGL said it has yet to determine any funding requirements for its possible participation in a sale of generating assets by Australia's New South Wales state, but would consider equity.

Analysts have said that buying some of the retail electricity assets to be sold by Australia's most populous state would be AGL's last major chance to significantly enlarge its footprint in Australia's power market.

"Any equity raising structured to take into account interests of all existing shareholders," the company said.

AGL already has about 77 percent of the gas market in New South Wales. The state is selling some A$8 billion ($7.2 billion) in power assets to help lessen its debt load.

Credit Suisse said earlier this month that AGL's funding capacity would likely be squeezed by its wind farm expansion programme and that it would need to raise equity should it take part in the power privatisation process.

Other funding options include selling down its stake in the Moranbah gas field or reducing its exploration spending, Credit Suisse analyst Sandra McCullagh said in the research note.

Separately, AGL forecast its 2010 underlying year profit would rise as much as 10 percent to between A$390-A$420 million, compared with A$379 million posted last year.

Shares in AGL, which has a market value of A$6.2 billion, were down 0.8 percent at A$13.82 by 0052 GMT, compared with a 1.9 percent fall in the broader index. ($1=1.113 Australian Dollar)