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Bulb of the UK will go into administration as funding talks fail

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  • The company has more than 1.7 million customers
  • It occupies about 5-6% of the market
  • More than 20 UK suppliers have fallen since September

Nov 22 (Reuters) – Britain’s Bulb expects to appoint administrators soon, it said on Monday, becoming the UK’s largest energy supplier to date in trouble since the recent rise in wholesale prices of gas and electricity.

More than 20 power suppliers have fallen since the beginning of September, unable to pass on rising costs to customers due to the Ofgem regulator price limit.

The London-based Bulb, which has about 1,000 employees and more than 1.7 million customers, or about 5-6% of the market, had been in talks with multiple parties but failed to secure funding.

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“The growing energy crisis … has worried investors that they can not continue while wholesale prices are so high and the price limit – created to protect customers – currently means that suppliers provide energy with a significant losses, “Bulb said in a statement on its website. .

Analysts have said the difference between what companies can charge a customer below the threshold and the actual cost of supplying them with energy from wholesale markets is about pa 400 ($ 538).

Britain’s domestic price limit has risen 12% -13% since October 1, but wholesale prices have risen much higher since that limit was set in August. Read more

Bulb said its international businesses in France, Spain and Texas were separate from the UK business and would continue to trade.

Ofgem did not respond to immediate requests for comment, but is expected to apply to the courts to use its Special Administrator Regime (SAR) which will ensure that customer supply is uninterrupted and credit balances are protected.

The scheme was created when an energy company fails, but it is too big for Ofgem to be able to find a new home for its customers using its usual processes.

It may also see the government providing grants or loans to keep the company running until a solution is found.

“The level of debt held by the company may mean that it is effectively partially nationalized for a period, so the taxpayer is getting involved in the currently unpaid power supply business,” said Sarah Coles, senior financial analyst at Hargreaves. Lansdown.

(1 $ = 0.7439 pounds)

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Reporting by Susanna Twidale in London Additional reporting by Yadarisa Shabong in Bengaluru and Carolyn Cohn in London. Edited by Vinay Dwivedi and Mark Potter

Our standards: Principles of Trust by Thomson Reuters.

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