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Failed UK power supplier Bulb pays millions in bonuses

The failed gas and electricity supplier Bulb Energy has paid millions of bonuses to retain workers Since the government bailout of £ 1.7 billion In November, according to people familiar with the payments.

Bulb was actually nationalized last year after collapsing with 1.6 million customers. It left The taxpayer With a bill estimated to reach £ 2.2 billion by next year, making it the largest country bailout since the Royal Bank of Scotland in 2008.

The company continues to operate with taxpayer money while under special management as the government tries to find a buyer. But officials fear that leaving the team could affect his ability to continue to serve customers.

Recruiting replacements will probably be difficult because of the UK’s tight labor market and the uncertainty surrounding the group. About £ 2 million have so far been paid in quarterly security bonuses, according to one close to the government.

The payments, which are not in the employees’ contracts, are made to retain a key team, including people in front of customers, to continue critical activity and support attempts to sell the business, said two knowledgeable people on the subject.

The Department of Business, Energy and Industrial Strategy said the employee retention program is needed to “maintain operational efficiency and support Bulb customers while energy managers fulfill their statutory responsibilities and support the process of finding a buyer for the company”.

The costs will add to the burden on taxpayers of supplier collapses at a time when energy bills are skyrocketing. It rose in a Parliamentary hearing Last week Hayden Wood, CEO and founder of Bulb Energy, still received the same £ 250,000 salary he received before rescuing the company.

Labor MP Andy McDonald, a member of the House of Commons’ business committee, asked MPs last week whether it was “morally justified” for taxpayers to pay Wood’s salary.

The company, which has never made a profit since its inception in 2015, Owes £ 254 million to customers Who paid for electricity and gas in advance when they collapsed last November.

In March 2020 it recorded a loss of £ 63 million despite sales of £ 1.5 billion. However, Wood and co-founder Amit Godka together earned more than £ 8m from the sale of shares in 2018, according to data first reported by Sunday Times.

Bulb said: “As part of Bulb’s 2018 fundraising, shareholders were offered the opportunity to sell shares to allow new investors to buy the business. Hayden participated in the sale of this stock alongside other shareholders.”

CEO Hayden Wood still receives the same £ 250,000 salary he received before Bulb’s rescue. © Chris J. Ratcliffe / Bloomberg

Bulb has been the largest supplier of the 29 companies that have failed since the middle of last year as a result of poor capitalization, Unsatisfactory fencing And an increase in wholesale gas prices.

Although millions of customers from other collapsed suppliers were transferred to tax competitors, Bulb was considered too large and therefore the costs are borne by the taxpayers.

Companies that have taken over smaller failing suppliers have demanded £ 1.84 billion from energy regulator Ofgem to cover costs. £ 1,971 this year for those consumers at a tariff covered by the price ceiling.

Bulb’s special administration is managed by the consulting firm Teneo but most of its staff is employed through the parent company Simple Energy, which is in a separate administration run by Interpath Advisory.

The team worked “incredibly hard” to ensure the business would continue to trade “amid the personal uncertainty” created by the administration, said Interpath, which declined to confirm the size of the custody payments.

Separately, Centrica – the owner of British Gas – declined to comment on a Sunday Times report that it was among the contenders for the business. Masdar, an energy company from Abu Dhabi, which was also identified as a potential buyer, did not respond to a request for comment.

Lazard advises On the sale process, in which the second stage is set in motion. Bulb, Teneo and Lazards also declined to comment.

Failed UK power supplier Bulb pays millions in bonuses Source link Failed UK power supplier Bulb pays millions in bonuses

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