In our previous blogs, we discussed the announcement that Bulb Energy Ltd (“Bulb“) was placed into special administration and considered the reasons why special administration (as opposed to ordinary administration) was deemed necessary in Bulb’s case, as well as providing an overview of how special administration differs from ordinary administration (and the supplier of last resort) process for energy suppliers.
Dan Butters, Matthew Smith and Matthew Cowlishaw (the “Special Administrators”) have now published their proposals for Bulb. In this blog, we provide an update on the steps taken by Bulb’s Special Administrators to date and their proposals.
Following their appointment, the Special Administrators notified the customers about the process and took steps to stabilise the business. They reached an agreement with Bulb’s wholesale supplier in order to secure a continued supply to customers during the trading period and have set up a team to deal with gas and power purchasing.
In addition, the Special Administrators have secured a funding package from the Government of c £1.7bn, comprising a cash fund facility and letters of credit. This funding is considered essential to allow Bulb to continue trading and protect its customers. Under the ‘Administration Funding Agreement’, Bulb will have to repay these funds as an expense of the administration.
The Special Administrators expect Bulb to remain in administration until a sale or rescue of its business as a going concern occurs, which is targeted for Spring 2022. The Special Administrators are currently looking for a buyer and it is expected the sale will take place in joint collaboration with the administrators of Bulb’s parent company, so that a prospective buyer can acquire all of the group’s operations.
In the meantime, in order to maintain Bulb’s energy supply licenses, the Special Administrators continue to liaise with Ofgem to ensure a continued supply to Bulb’s customers and to increasing the likelihood of selling the business as a going concern.
This is all good news for Bulb and its customers, but with increasing pressures on the energy market in light of the position in Europe, will Bulb be the first (and last) special administration in the energy sector? We will have to wait and see.