Hundreds of jobs at risk as energy firm calls in administrators
STRUGGLING energy broker Utilitywise has called in administrators, two weeks after putting itself up for sale amid mounting financial troubles.
The company has appointed FTI Consulting to take charge of its enterprise division, which provides energy brokerage to businesses around the country.
The firm pulled the plug after saying it had been “unable to raise sufficient funding to cover trading losses and implement the turnaround strategy required”. It also said it had not received any offers to buy either the enterprise division or the company as a whole.
Other parts of the group are still up for sale, but dozens of workers at the firm have contacted The Journal and The Chronicle to say that hundreds of people have lost their jobs at the company’s Cobalt headquarters.
Utilitywise – which was launched in 2006 – said at the end of January that it desperately needed £10m to finance a new turnaround strategy, with its bank only renewing its lending facilities if it had funding in place to pay for those plans.
The major employer had around 1,000 employees, though this was a big reduction from the 1,600 employees logged in accounts a year ago.
The Journal and The Chronicle had revealed yesterday that Utilitywise founder Geoff Thompson had been hoping to rescue the firm with what he described as a “very credible” rescue package. Shares in the firm were suspended on February 1 at 1.9p. At their height in 2014 shares reached 370p.
A number of Utilitywise employees took to social media after the announcement at the company, with one saying: “The very best of crack finding out that you’re not getting paid the 3k you were supposed to be at the end of the month and the company has gone into administration.”
Another said: “Jobless now, thanks Utilitywise plc.”
A statement released by the company said: “On 13 February 2019, Andrew Johnson and Chad Griffin of FTI Consulting LLP were appointed as Joint Administrators of Utilitywise Plc (“UTW”). UTW is the AIM-listed holding company of the Utilitywise Group (“the Group”), and the trading entity for the Group’s Enterprise division, which provided energy and utility brokerage services to micromarket and SME businesses customers.
“After extensive discussions with the Group’s largest shareholders and other stakeholders, the directors of UTW were unable to raise sufficient funding to cover trading losses and implement the turnaround strategy required by the Enterprise business.
“Furthermore, the formal sale process for the Group announced by the board on 28 January 2019 did not result in any offers to acquire the Enterprise division, or the Group as a whole.
“Consequently, the directors of UTW sought the appointment of Administrators at UTW.
“The Administrators have taken the decision to cease trading for the Enterprise division immediately, but are continuing the sales process for UTW’s subsidiary companies. All other group entities remain outside of an insolvency process and continue to trade as normal.”
Following his appointment as administrator, Andrew Johnson said: “Given the absence of a potential purchaser for the Enterprise division and the continuing significant losses within that part of the business, we are unable to continue to trade, and will cease the operations of the Enterprise division immediately.
“This will unfortunately result in a substantial number of redundancies, primarily at UTW’s head office in Newcastle.
“We have received expressions of interest from a number of parties for UTW’s subsidiary companies Icon Communication Centres s.r.o and Energy Intelligence Centre Limited, which operate the Europe division and Corporate division respectively.”