Octopus has requested £1 billion of taxpayer money to help finance the takeover of bust supplier Bulb. Octopus plans to purchase the 1.6 million people that were clients at Bulb for around £200 million. Also, with the package, Octopus would share part of its profits with the government in the future as a form of repayment, as the entire sum of £1 billion is alleged to be repaid in the future. The purchase would mean an end to an 8-month period of uncertainty for Bulb clients on what would happen and which supplier they would become part of.
Published on: 29-07-2022

Finally takeover after months of special administration for Bulb

Bulb was the 7th largest energy supplier in the UK serving almost 1.7 million clients until its collapse in the autumn of 2021. The company, like so many other energy suppliers, could not bear the increasing wholesale costs of electricity and gas and was unable to remain in business. Bulb was by far the largest supplier that ceased business and since such a big company collapsing was unprecedented, the government stepped in and held Bulb under special administration until it was possible to transfer all the customers to a different supplier.
Octopus was the only bidder for the customers of Bulb

Why does Octopus need that much tax money?

Both the government and Octopus were not available for comments. Octopus stated that it never comments on rumours related to M&A deals before any official communication is done. The government also declined to comment because of the commercial sensitivity involved. Octopus would use the money to buy energy through a practice called hedging. With these large purchases, the company would be better able to protect customers from unexpected price hikes and therefore hopefully keep bills down as much as possible. Because Bulb has been under administration for the past 8 months, it was not able to hedge its energy and therefore, the price that Octopus will now pay will be considerably higher, with the higher energy costs prevailing in the market at the moment. It is understood that Octopus will pay the entire £1 million back over time. Part of the payback scheme would involve a profit share deal between Octopus and the UK government for a specific time period to pay the sum back.

I am a customer at Bulb, will anything happen to my energy supply?

No, Bulb, Ofgem, and Octopus will ensure that nothing will happen to your energy supply and you will never be cut off from the grid. Keep paying your bills at Bulb until they will contact you for further information. They will provide instructions for your payments to Octopus, which sometimes could be transferred automatically among your other details to them or they will provide you with the right information on how to inform Octopus. Ofgem will actually make sure that no matter what happens with the transfer, your energy supply will remain uninterrupted in any way.