Centrica hits government and withdraws from valve auction

British Gas owner Centrica has withdrawn from a failed energy provider’s light bulb auction, and the UK government is struggling to achieve a competitive bidding process.

valve It collapsed in November last year as natural gas prices soared and new funding could not be raised. The government has intervened to confirm that 1.6 million customers still received energy and planned to sell their business by the end of July.

Withdrawal from Centrica leaves only two potential bidders confirmed — Octopus energy, The fifth largest supplier and energy company in Abu Dhabi, Masdar — according to people close to the contract. One option is to team up with two teams, Masdar providing cash, and an octopus, who has never taken over a light bulb customer and made a profit.

OvoThe sixth-largest energy company has not been excluded from bidding, but the company announced thousands of redundancy earlier this year and is in the red, so it needs to raise money.

The sales process that Lazard is processing is expected to win this Thursday.

The bankruptcy of a light bulb is expected to cost the government at least £ 2.2 billion, making it the largest state bailout since the Royal Bank of Scotland in 2008.

In the six months since nationalization, light bulbs have lost £ 886 million and consumer costs have risen, according to an administrator report released this week.

A large number of creditors, many of them small businesses, have a debt of £ 585m and are unlikely to be paid. However, Sequoia, an infrastructure fund backed by Bulb’s parent company Simple, is guaranteed to receive an initial £ 55m investment and has earned a dividend of £ 10m since November.

Interpath, the administrator of Simple, has charged £ 3.7 million, or £ 800 per hour, for 4,646 hours since the light bulb collapsed. An additional £ 2.5 million in statutory costs has been partially paid primarily to law firm Freshfields, and Lazard, which is processing the sale, is expected to receive £ 1.5 million.

Teneo running the management process is expected to receive tens of millions of pounds.

The decision that Centrica will not move forward suggests that the Department for Business, Energy and Industrial Strategy wants buyers to take on more light bulb debt than the energy group wanted. In addition, Centrica, as the largest household energy supplier, may have been steered by the Competitive Markets Authority that regulators are unlikely to want to increase market share.

The National Audit Office has criticized energy regulator Ofgem’s response to the crisis, and 30 suppliers, including light bulbs, have collapsed in the past year.

Customers of all suppliers pay at least £ 96 a year to cover the cost of a failed business, some of which have already been added to the energy bill. This does not include the cost of relieving the light bulbs currently paid by taxpayers, but will eventually be added to the customer’s invoice.

Hayden Wood, CEO and founder of Bulb Energy, is still paid the same £ 250,000 salary he received before the company’s bailout, and the company is tentatively former N-Power executive Simon Stacey. Is hired as the chief financial officer.

Teneo, Interpath, Centrica, Octopus, Lazard, Bulb declined to comment, and Masdar could not.

Centrica hits government and withdraws from valve auction

Source link Centrica hits government and withdraws from valve auction

Back to top button