SEAMLESS

Bulb, Britain's seventh biggest energy supplier, has formally entered into administration- becoming the biggest victim so far of the crisis in the industry.

The government loan will mean the administration is managed in a way that the lights stay on for Bulb's 1.7 million customers.

That process is being adopted because Bulb is regarded as too big to be handled in the same way as the more than 20 smaller rivals that have already succumbed since the start of September as surging wholesale gas prices put their finances under strain.

in those cases, regulator ofgem lets a firm to take on customers to a new supplier.

It will mean hundreds of millions of pounds of taxpayers' money being used to fund the company's obligations in the wholesale energy markets to ensure that it can continue operating.

The companies found themselves caught out after a surge in wholesale gas prices to record levels left them losing money on the energy they were contracted to sell to households and businesses at lower prices.

In a stock market update on Wednesday, Sequoia referred to its concerns over a "loan to a UK energy supply company which has been ( in effect ) 'nationalised' by the UK government".

Sequoia noted that during special administration that it would be "unable to enforce its security over the assets of the borrower" and that funding provided by the government "may rank senior" to its loan.

The UK government has set aside nearly £1.7bn to allow energy firm Bulb to continue supplying energy to customers.

bulb will instead enter "special administration" and be run by administrator teneo until a buyer can be found or until its customers have moved.

Due to its size, Bulb will be run as normal for the time being, rather than its customers being immediately transferred to other suppliers, as has happened with other failing energy providers.

By April, the cap on energy prices may have increased significantly, which would mean higher revenues for the business.

Earlier in the day, Mr Kwarteng said the special administration regime was a temporary arrangement to provide "an ultimate safety net to protect consumers and ensure continued supply".

Mr Miliband called for "a proper external review of the regulation of the market".

Like the other 22 energy suppliers that have collapsed since August, Bulb has been squeezed between rising wholesale gas prices and the cap set by Ofgem – the energy regulator – on the amount it can charge consumers.

Labour MP Alex Sobel said : "We 're moving back to an oligopoly of energy companies who are increasing their profits whilst the supplier of last resort is socialising losses.

"should provide reassurance" to bulb customers.

"Its customers will continue to see their bills limited by the price cap, which is likely to be the best deal for them at the moment.

News earlier this week that Bulb Energy is to go into special administration is the latest episode in a period of unprecedented financial strain in the UK's energy sector.

But Bulb's failure is particularly significant because of the size of its customer base.

Though there has been an influx of smaller companies in recent years, the energy market is dominated by a handful of large companies : Centrica, the parent of British Gas, EDF Energy UK, E.ON UK, npower, Scottish Power and Ovo, which recently acquired the retail arm of SSE.

Founded in 2015, the startup posed as less of an energy company and more of a tech firm – the Deliveroo or Uber of the fuel market that would challenge the old logic of the sector.

If a taxi app collapses, it ultimately does not matter as much as the failure of a supplier of finance or fuel.

In the short term, one obvious solution is for the watchdog Ofgem to pay far more attention to the financial viability of businesses in its sector.

That will frankly make it harder for smaller players without ready access to a cash fountain.

Stay up to date with our posts

Seamless Daily is an innovative news platform that is updated 24/7 to help you keep up to date with all the current events around the globe.

Our team of professional editors as well as our state-of-the-art artificial intelligence platforms ensure that our curation is accurate, fact-checked, and trustworthy.

Click here to subscribe

Read more

COVID-19: General Hospital actor Steve Burton says he has been fired over his refusal to get vaccinated

Ex-soldier Colin Reeves, 34, charged over murders of husband and wife in Norton Fitzwarren

At least 31 migrants die after dinghy sinks in Channel off Calais