Bulb’s parent company secured creditor has forced a last-minute change on its director as he seeks to protect a £ 55million exposure he has to the collapsed energy supplier.
Sky News has learned that Sequoia Economic Infrastructure Income Fund, a company listed on the London Stock Exchange, decided on Wednesday to block AlixPartners’ appointment as a director of Simple Energy.
Sources in the city said Sequoia, which has loaned Bulb a total of £ 55million, had mandated Interpath Advisory – the former restructuring arm of the big accounting firm – to handle Simple Energy’s insolvency at the square.
The last-minute change was said to have taken place in a dispute over Sequoia’s demands regarding ongoing trade and financial agreements between Simple Energy and Bulb, the latter now operating under the auspices of Teneo Restructuring.
Ofgem, the energy watchdog, took to the courts on Wednesday to appoint Teneo as special administrator of Bulb – the first test of a new bailout scheme that will leave UK taxpayers at the mercy of a bill that is expected to fail amount to hundreds of millions of pounds. .
Formal confirmation of the appointments of directors is expected Thursday morning.
A person close to the Sequoia fund hinted that AlixPartners had been removed from his position as a standby administrator of Simple Energy due to doubts about his independence and fears of being too close to the special administrator.
These suggestions were categorically rejected by people close to AlixPartners and the Bulb process at large.
An insider said Sequoia is seeking immediate repayment of a significant portion of its loan, with the remainder being repaid in monthly installments.
Sky News revealed earlier this week that Sequoia’s objections to the terms of Bulb’s restructuring proposed by the government and Ofgem had become the latest obstacle to appointing directors.
In a statement released Monday on the stock exchange, Sequoia said it had “learned from a press article that Bulb Energy Ltd was in favor of entering the special administration regime established by the 2011 Energy Law”.
“If this were to happen, the Investment Adviser notes that Bulb’s parent company, Simple Energy Limited (‘Simple’), would go into normal administration. “
A Transition Services Agreement (TSA) must be in place between Simple Energy and Bulb during the insolvency, according to insiders.
Meanwhile, Lazard, the U.S. investment bank, is expected to be asked by directors to hold an auction for the company in the coming months.
Competitors such as Octopus Energy, OVO Energy and Shell Energy Retail are expected to review offers for Bulb, which has 1.7 million customers.
Bulb, which is Britain’s seventh-largest domestic energy supplier, is the latest in a series of more than 20 suppliers to collapse since early August.
Lazard and AlixPartners both worked with Bulb before its collapse on some aspect of its cash flow management and fundraising options.
A spokesperson for the Department of Business, Energy and Industrial Strategy said on Wednesday: “Energy regulator Ofgem, with the agreement of the government, has filed an application with the court. We are not commenting ongoing legal proceedings.
“The special administration regime is a long-established, well-established mechanism to protect energy consumers and ensure continuity of energy supply in the event of a supplier failure.
“Bulb customers have nothing to do, there will be no disruption to current energy supply or prices, and credit balances are protected.”