Bulb Energy: the troubled hunt for a buyer
Nearly six months on – amid mounting embarrassment and expense – the need to offload Bulb is becoming pressing
“We do not want this company to be in this temporary state longer than is absolutely necessary,” Business Secretary Kwasi Kwarteng told Parliament last November, when announcing the £1.7bn quasi-nationalisation of Bulb Energy. Nearly six months on – amid mounting embarrassment and expense – the need to offload Bulb is becoming pressing, said Gill Plimmer, Michael O’Dwyer and Jim Pickard in the Financial Times.
Last week, co-founder Hayden Wood disclosed he is still being paid £250,000 a year to run the collapsed energy supplier. Meanwhile, around £2m has been forked out on bonuses to retain key staff. The overall bill for taxpayers is estimated to reach £2.2bn by next year, “making it the biggest state bailout since Royal Bank of Scotland in 2008”.
Wood and his co-founder, Amit Gudka, each “extracted” more than £4m from the disruptive but perennially loss-making company in 2018, said The Sunday Times. Yet it was their “naivety” in failing “to hedge properly” against rising wholesale prices that felled Bulb. Fortunately for the Government, a couple of bidders have hoved into view. British Gas owner Centrica is offering to take on Bulb’s 1.7 million customers – “leaving behind the staff, offices and brand”. The Abu Dhabi clean energy company Masdar has put in a competing bid for the business as a whole.
Neither tilt is “unproblematic”, said Nils Pratley in The Guardian. Masdar has no experience of the UK retail energy market. And handing Bulb to Centrica “would entrench the market leader’s dominance”, and mean paying the “dowry” it is demanding to cover energy costs. Ultimately, “plan B” – a full break-up of Bulb – may be the best way “to clear a developing political headache”. In the meantime, “there is no justification” whatsoever for Wood’s “generous retainer”.