Sequoia swoops in to switch administrator of Bulb’s parent company
Sequoia has intervened at the eleventh hour to force Simple Energy – the parent company of doomed supplier Bulb – to switch administrators.
The dramatic move was made by the funding company in an attempt to claw back £55m owed by Simple Energy.
It blocked previous plans for AlixPartners to become Simply Energy’s administrator, reportedly because Sequoia doubted its independence.
Interpath Advisory is now handling Simple Energy’s insolvency instead.
The decision follows Bulb entering a special administration process on Monday, while parent company Simple Energy moved into insolvency on a separate basis.
Bulb, which is Britain’s seventh-largest domestic energy supplier, is the latest in a line of more than 20 suppliers to collapse since the start of August.
Its fall from grace left 1.7m customers with an uncertain future amid a deepening winter energy crisis.
The court has approved Ofgem’s request to appoint Teneo as Bulb’s administrator, with the government also backing the market regulator’s request to begin a special process.
The measures could de-facto nationalise the failed firm and leave the firm in the hands of administrators, propped up by public money in the form of grants and loans from the Business Department.
The government has set aside £1.7bn to loan to Bulb’s special administrators so it can continue operating.
During the proceedings, the crippled challenger company revealed it only has £8.5m left in its dwindling coffers.
Unlike the 21 energy firms that ceased operations over the past three months amid soaring wholesale costs, Bulb is too big for the supplier of last resort process where Ofgem simply allocates customers to new homes. The largest firm to cease trading – Avro Energy – had only a third of the customers.
Instead, Bulb will be placed on extensive life support, with the taxpayer potentially providing regular injections of public funds in until its long-term fate is decided.
Sky News understands that Lazard, the US investment bank, is likely to be asked by the administrators to oversee an auction of the business over the coming months.
It has spent the past few months trying to secure new funds for Bulb in vain.
Competitors such as Octopus Energy, OVO Energy and Shell Energy Retail are now expected to re-examine bids for the firm.