People’s Energy pair set for hefty dividend pay-out
Founders of a failed energy supplier could share a hefty pay-out of more than £50m, despite its collapse leaving a whopping £283m bill for consumers.
David Pike and Karen Sode – the duo behind The People’s Energy Company (People’s Energy)- could gain the huge dividend from administrators.
This is courtesy of valuable energy contracts the company held at the time it collapsed, according to Bloomberg.
People’s Energy was home to 350,000 customers, but was one of dozens of suppliers to collapse during the ensuing market crisis last winter.
The firm fell into the supplier of last resort process in September amid soaring wholesale costs and the constraints of the price cap.
Its customers were transferred to British Gas, which can claim £283m from all households for the costs it incurred, mostly for buying energy to supply them.
The overall clean-up bill for ferrying over two million customers from fallen firms to surviving suppliers is estimated at £2.7bn.
People’s Energy had wholesale energy contracts in place via BP at the time it collapsed.
These were then sold on behalf of the administrators, bringing in almost £300m.
BP was repaid almost £12m it was owed but administrators anticipate paying a “material dividend” to creditors.
Currently, Ofgem is involved in a court case to try to maximise the amount that can be recouped.
Bloomberg has estimated that even even when creditors are paid off, there could be as much as £235m left to pay shareholders.
Morning Wire has approached Alvarez & Marsal, People’s Energy administrator, for comment.