British energy supplier Bulb may be the next victim of the ongoing energy crisis as it is reportedly poised to go bust in the coming days, sparking government plans to bring in contingency plans.
According to Sky News, which reported it first, ministers are in talks with a small number of potential buyers, however, a rescue deal is looking unlikely, it said.
The collapse of the company, which has 1.7 million household customers in the UK, would be the largest in the sector so far and affect around 1,000 jobs. The broadcaster said that officials, and regulator Ofgem are braced for the collapse as several suitors have backed out of deals in recent days.
Ovo Energy, Octopus Energy, and Shell Energy Retail (RDSB.L) are among the rival groups which have had access to Bulb’s financial data in recent weeks.
Bulb is the UK’s seventh biggest domestic energy supplier and was known to be hunting for fresh investment to shore up its finances after making a £63m ($87m) loss in the year to 31 March 2020.
A Bulb spokesperson said: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”
A surge in natural gas prices in recent months has already seen a number of companies go out of business. The total number stands at 14 so far this year, with more than 2 million customers affected.
In September alone, nine suppliers went bust including Avro Energy and People’s Energy, with business and energy minister Kwasi Kwarteng cautioning that more could collapse in the coming weeks.
Earlier this month Pure Planet, which is backed by oil giant BP (BP.L), and Colorado Energy also ceased trading.
Reasons behind the dramatic increase in power prices include low gas reserves, strong commodity and carbon prices, heightened global demand, and low wind output.
Source: LaToya Harding | uk.finance.yahoo.com