A&M appointed administrator to PFP Energy

Administrators from Alvarez & Marsal have been appointed to PFP Energy. The company’s customers have been transferred to British Gas as part of the Supplier of Last Resort process.

PFP Energy was based in Preston and employed around 50 people. The firm supplied gas and electricity to around 66,000 domestic customers and 25,000 non-domestic customers.

With wholesale gas prices in the UK having sharply risen in 2021, however, PFP has become one of the latest in a succession of energy providers to fall into administration. Paul Berkovi, Paul Flint and Rob Croxen of Alvarez & Marsal (A&M) Europe have been appointed as Joint Administrators to PFP Energy and PFP Energy Supplies, and will now look to sell on the company’s remaining assets.

Paul Berkovi, Joint Administrator said, “The UK’s energy retail sector is facing well-publicised issues. PFP has unfortunately been unable to avoid the challenges it and other suppliers have faced and, against this backdrop, the Company has taken the difficult decision to appoint administrators. The focus for the administrators in the coming days will be in supporting employees and working with British Gas on a smooth transition for customers.”

Industry regulator Ofgem transferred the company’s customers to British Gas earlier in September. Meanwhile, energy supplies have remained secure throughout this process and both, commercial and domestic credit balances have been protected as part of this transition. Looking ahead, it is likely that a proportion of PFP’s staff will be retained in the short term to assist with the transfer of customers to British Gas, raising of final bills, to assist with the credit control process and assist the Joint Administrators with their statutory duties.

Founded in 1983, A&M is a global professional services firm that provides advisory, business performance improvement and turnaround management services. Comprised of experienced operators, consultants, former regulators and industry authorities, A&M uses its restructuring heritage to help clients with corporate turnarounds and administrations around the world.

UK energy crisis

With an increasingly costly utilities sector pricing many consumers into debt for the bare necessities of power and water, the UK’s market has often been slated by critics for forcing many consumers to “choose between heating and eating.” However, a report from global consultancy Atos in 2018 suggested that the sector is “on the verge of a technological revolution” with smaller, digitally savvy operators soon to eat into the profits of mega firms, “spelling profound change for the industry.”

Three years later, that particular assertion is looking like an ever more distant dream, with the news that a spattering of smaller energy firms have collapsed, or are on the brink of doing so. After the price of buying wholesale gas shot up, more than 1.5 million people across Britain have now been affected by energy suppliers going bust.

These rising costs are putting the most pressure on smaller and medium-sized companies. Amid the crisis, six such suppliers have already folded in September, and there are growing fears more could shortly follow suit as the nation approaches the cold winter months.

Alongside PFP, the firms to have already folded include HUB Energy, MoneyPlus Energy, Utility Point, People’s Energy, Green, and Avro Energy. UK energy companies Bulb and Igloo are also reportedly on the brink, according to the British press, with the former seeking a bailout and the latter in talks with a professional services firm on a potential insolvency process.