Short sellers target SSE as it faces £200m bill

HEDGE funds are betting on a fall in the share price of Big Six energy giant SSE as it faces a £200 million bill to upgrade its ageing computer systems.

Bets against SSE’s share price hit an all-time high last week, with Marshall Wace and WorldQuant’s taking £170million of so-called short positions, where they profit if the share price falls.

The short-sellers could benefit as SSE tries to regroup after its failed merger with rival Npower. It had planned to use Npower’s new systems as part of the £3 billion deal, but will now need another solution.

All five of its biggest rivals – British Gas, Eon, Scottish Power, EDF and Npower – have gone through major upgrades of their systems.

An industry source said SSE’s ageing technology is unlikely to be able to cope with the switch to smart meters, which send real-time energy usage data to companies every 30 minutes.

The source added: ‘Typically, energy firms have added on new bits to their old systems to keep up. But, with the introduction of smart meters, everyone realised they need a full upgrade.’

Sources close to the Npower deal said the cost of a new system for SSE would be between £150million and £200million.

An SSE spokesman said: ‘Our billing system performs well and will do so for years to come.

‘Technological advancements mean it’s easy to build all required functionality into the existing system to ensure it’s fit for the future.’