Scotland Times

Friday, Apr 26, 2024

UK energy company seeks funds to stay afloat

UK energy company seeks funds to stay afloat

The UK's sixth largest energy company, Bulb, is seeking a bailout to stay afloat amid surging wholesale gas prices.

The company, with 1.7m customers, is working with the investment bank Lazard to try to shore up its balance sheet.

It is the latest energy company battling to avoid going bust, with at least four smaller UK firms expected to go out of business next week.

High global demand for gas has caused a recent surge in wholesale prices.

A bailout for Bulb could come as part of a joint venture or merger with another company, with a further option being a cash injection from investors, according to the Financial Times, who first reported the story.

In a statement, Bulb told the BBC: "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."

Industry group Oil & Gas UK said wholesale prices for gas had increased by 250% since January - with a 70% rise since August.

The price hike has left some companies unable to provide their customers with the energy they have paid for.

However, if a supplier fails, energy regulator Ofgem will ensure supplies continue for affected households, and they will not lose money owed to them.

A new energy supplier would be responsible for taking on any credit balances a customer may have.

Four small energy companies ceased trading in recent weeks, including Edinburgh-based People's Energy, which supplied gas and electricity to about 350,000 homes and 1,000 businesses, and Dorset-based Utility Point which had 220,000 customers.

At the beginning of 2021 there were 70 energy suppliers in the UK, but industry sources have said there may be as few as 10 left by the end of the year.


The rise in gas prices has not only affected companies supplying energy, but food firms and supermarkets who use gas, in particular carbon dioxide, to deliver and store produce.

CO2 is also used to stun animals before slaughter and as a coolant agent in transport.

US firm CF Industries, the UK's biggest CO2 producer, stopped production at its Teesside and Cheshire fertiliser plants due to the gas prices, which has sparked concern across the food production industry.

Richard Walker, managing director of supermarket Iceland, tweeted that CO2 was "essential for a wide range of food and medical uses".

"Yet 60% of the UK's supply comes from only two sites, owned by one foreign company, who have decided to close due to profitability," he added.

"Surely matters of national security should be state-controlled?"

'Confident of supply'


Business Secretary Kwasi Kwarteng has held talks over the gas shortages with the boss of the US company, Tony Will, who flew into the UK on Sunday.

Mr Kwarteng said he was "confident security of supply can be maintained under a wide range of scenarios".

He said he would host further talks with the energy industry and consumer groups on Monday.

Emma Pinchbeck, chief executive Energy UK, the industry's trade body, said talks with the government focused on how companies got through the current period with as little impact on customers as possible.

"The whole of the energy sector is facing unprecedented prices," she told the BBC

"We are reliant on a volatile international commodity in the UK because we are highly dependent on gas both in our own homes where we burn it for heat.

"We do that at a level beyond our European neighbours, but also for our power sector and other uses in the economy, so when we get an unprecedentedly high price there are unprecedented impacts on the market."

Newsletter

Related Articles

Scotland Times
0:00
0:00
Close
UK Island Orkney council to look at proposals to become territory of Norway
Woman Awarded Over £100,000 After Being Fired for Transgender Tweet
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
A Real woman
Brand new security footage has just been released to the public showing the Active shooter Audrey Elizabeth Hale drove to Covenant Church School in her Honda Fit this morning, parked, and shot her way into the building
China's foreign ministry branch in Hong Kong urges British gov't to stop the biased and double standards Hong Kong report
Double standards: UK lawmakers attack EU chief over Ireland claims
Democracy? Not for UK. UK PM rejects Scottish independence referendum, cancel democracy in BVI
UK urged to brace for economic storm
Women's own body dissatisfaction appears to influence their judgment of other women's body sizes
Prince William To Move Family Into Cottage Near Queen Elizabeth II
BOOOOOOS: Tony Blair receives royal honour
Captured Britons sentenced to death in Ukraine
Barbados PM Mia A. Mottley among Time Magazine’s 100 Most Influential People
Today's headlines
"Just One Of the Boys In School:" Years That Shaped Prince Charles
BVI Premier Rubbishes Claim Of Causing COI Delay
Comments on "Human Intelligence in a Digital Age" - A brilliant Speech by MI6 Chief Richard Moore, and the elephants neglected in the room
Bitcoin: BoE Deputy Gov wants to cancel democracy and protect the banks with regulations which infringe on people’s freedom, independence and benefits they get from their own money.
What are the Pandora Papers?
Taiwan-China relations at their 'worst in 40 years'
The attempt to hold Epik.com accountable for the content of its clients' websites is like blaming Gutenberg for the NYT's fake news that dragged the US into the pointless war against the nuclear weapons Iraq never had
×