Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Energy retailer Bulb is in talks with an investment bank as it seeks to weather the storm of wholesale power price hikes.
News that a supplier of 1.7 million customers is seeking a financial lifeline comes as the government is engaged in emergency talks with the industry and Ofgem about a “way forward”. It has made clear that a “special administration” process is on standby in the event of a large supplier exiting the market.
Bulb has engaged Lazard to explore its options, with a fresh cash injection or a possible merger believed to be among the avenues being considered.
The Financial Times reported today that Bulb has been highlighting the quality and size of its database of customers in approaches to other suppliers. However, one potential new backer approached about funding Bulb told the paper it would be difficult “given the current environment”.
A Bulb spokesperson said: “From time to time we explore various opportunities to fund our business plans and further our mission to lower bills and lower CO2. Like everyone in the industry, we’re monitoring wholesale prices and their impact on our business.”
The Department for Business, Energy & Industrial Strategy issued a statement last night (18 September) following talks with senior energy executives about the pressures facing the sector.
Secretary of state, Kwasi Kwarteng, was due to meet Ofgem this morning “to discuss the issues raised by the industry in more detail” and will convene a roundtable tomorrow “to plan a way forward”. Kwarteng also said he was “in contact with colleagues across government to manage the wider implications of the global gas price increase”.
He insisted that security of supply was not a cause for immediate concern within the industry.
His statement acknowledged the pressures faced by energy companies and pointed to “robust measures in place” to protect customers in the face of a supplier exiting the market. It also directly addressed the fears within the sector that the Supplier of Last Resort process would not cope with the failure of a large supplier.
It said: “If the appointment of a Supplier of Last Resort is not possible, Ofgem and the Government have agreed processes in place to appoint a special administrator to temporarily run the business until such time as a new supplier can be found for the customers.”
Read Utility Week’s analysis of the pressures facing the energy retail sector here.
Please login or Register to leave a comment.