The Daily Telegraph

British Gas owner seeks bank funding


THE owner of British Gas is seeking to secure billions of pounds in extra cash from the banks in response to volatility in the energy markets.

Centrica, the UK’S largest supplier of gas and electricit­y to households, is in talks with lenders about additional short-term financing to allow it to meet collateral demands.

Power producers are required to post ballooning sums as collateral with exchanges because of the extreme price changes in wholesale energy markets.

The FTSE 100 company’s move is “pre-emptive”, the Financial Times reported, and reflected chief executive Chris O’shea’s “conservati­ve” approach to managing its finances.

Its plans for additional funding come amid mounting calls on the incoming government to provide financing help for the energy sector. Analysts at Royal Bank of Canada said “even the strongest utilities are facing huge pressure in terms of collateral payments”.

Meanwhile, European electricit­y generators said they have “grave concerns” over liquidity strains and requested collateral requiremen­ts in wholesale power markets be eased. At the weekend, Finland and Sweden unveiled emergency measures for electricit­y generators Centrica declined to comment.

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