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UK government on hold as energy supplier Bulb faces collapse

The UK government is in talks with a small number of potential buyers for Bulb, however a bailout deal seems unlikely. Photo: Jeremy Selwyn / WPA Pool / Getty

UK energy supplier Bulb could be the next victim of the ongoing energy crisis, as it is said to be on the verge of bankruptcy in the coming days, triggering government plans to put contingency plans in place.

According to Sky News, which first reported it, ministers are in talks with a small number of potential buyers, however, a bailout deal seems unlikely, he said.

The collapse of the company, which has 1.7 million client households in the UK, is believed to be the largest in the industry to date and affects around 1,000 jobs. The broadcaster said officials and regulator Ofgem were bracing for the collapse as several suitors withdrew from the deals in recent days.

Among rival groups that have gained access to Bulb’s financial data in recent weeks are Ovo Energy, Octopus Energy and Shell Energy Retail (RDSB.L).

Read more: Gas crisis: 250,000 customers affected while two other suppliers collapse

Bulb is the UK’s seventh largest domestic energy supplier and was known to be looking for new investments to shore up its finances after suffering a loss of £ 63million ($ 87million) over the course of the year until March 31, 2020.

A Bulb spokesperson said: “Our discussions with several parties to secure additional financing continue to progress well and we are encouraged by the decline in wholesale energy prices.

“We expect the government to monitor wholesale prices and their effects on the industry as a whole, but ministers and Ofgem have made it clear that we need to emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past. “

The surge in natural gas prices in recent months has already led to the bankruptcy of several companies. The total number stands at 14 so far this year, with over 2 million customers affected.

Read more: Gas price crisis: PM should support millions in bailout loans for industry

In September alone, nine suppliers went bankrupt, including Avro Energy and People’s Energy, with Business and Energy Minister Kwasi Kwarteng warning others could collapse in the coming weeks.

Earlier this month, Pure Planet, which is backed by oil giant BP (BP.L), and Colorado Energy also went out of business.

The reasons for the dramatic increase in electricity prices include low gas reserves, high commodity and carbon prices, increased global demand, and low wind generation.

Watch: Energy Crisis: Boris Johnson Reportedly Backs Multi-Million Pound Plan To Support Business

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