This won’t make good reading but almost 60% of remaining small energy firms are “technically insolvent”.
A recent report highlights that the balance sheet position of six energy suppliers has worsened since January while only a single business has seen its balance sheet position improve.
The report found that of the 20 remaining suppliers (excluding the Big Six and two businesses with suppressed risk scores), 12 have negative assets on their balance sheets and are likely to go out of business.
This will put even more pressure on the industry to offload their customers to the remaining suppliers, which also has a long term cost to bear on all customers.
It has also been estimated that the cost of placing Bulb into ‘Special Administration’ will have cost £4 billion up to spring 2023.
We’ve seen over half of smaller suppliers have already gone bust and nearly two-thirds of the remainder are technically insolvent and at imminent risk of collapse.
For those businesses to continue they will only be able to access funding if there are personal guarantees from directors, which in this climate is unlikely to happen.
So, get ready for another round of failures in the market.
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