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Energy broker Utilitywise has announced it has gone into administration, with 576 jobs being made redundant.
The worst hit area will be the company’s Newcastle office, with around 460 redundancies announced.
Yesterday (13 February) Andrew Johnson and Chad Griffin of FTI Consulting LLP were appointed as joint administrators of Utilitywise Plc (UTW), the holding company of the Utilitywise group and the trading entity of the group’s enterprise division.
Citing “challenging operating and market conditions”, Utilitywise said the enterprise division incurred “significant trading losses”.
It added that after extensive discussions with the group’s largest shareholders, the directors of UTW were unable to raise the sufficient funding to cover trading losses and implement the turnaround strategy required by the enterprise business.
No offers were received to acquire the enterprise division, or the group as a whole after the formal sale process was opened by the board on 28 January this year.
The company’s shares fell to an all-time low of less than 2p each after the announcement of the proposed sale.
Utilitywise sought £10 million to fund a strategic overhaul of the business. The firm said the money was also necessary to renew its existing credit facilities – worth £25 million in total -which were due to expire in April.
Following his appointment as administrator Andrew Johnson, said: “Given the absence of a potential purchaser for the enterprise division and the continuing significant losses within that part of the business, we are unable to continue to trade, and will cease the operations of the enterprise division immediately.
“This will unfortunately result in a substantial number of redundancies, primarily at UTW’s head office in Newcastle.”
Johnson added UTW’s subsidiary companies Icon Communication Centres and Energy Intelligence Centre Limited are not in the insolvency process and continue to operate on a “business as usual” basis.
Early media reports suggested that 1,000 jobs are under threat as a result of the announcement, but Utility Week understands as of the end of yesterday 770 were employed by the group.
Around 30 employees are thought to have taken voluntary redundancy when the company was revealed to be in difficulty. A total of 160 people remain employed by the viable parts of the group.
In December 2017 it was announced that after serving on the board for over 11 years, Geoff Thompson was to step down as non-executive chairman of Utilitywise.
Thompson first established the business in 2006 and became executive chairman in October 2016 when Brendan Flattery took over as chief executive.
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