Good news for Warrington as Together Energy liabilities slashed
The council’s potential financial exposure to the collapsed firm has been reduced from £66.17m to £36.85m – but could be as little as £9m, according to the authority.
Warrington Council had a 50% stake in Together Energy, having made an equity and debt investment in the company “to help fulfil its climate change policy ambitions” in 2019. Together Energy went bust in early 2022 – a turbulent time for energy providers, with close to 30 entering administration as a result of the soaring cost of gas.
Warrington has now published an update on Together Energy’s administration. The report states that the council’s potential liabilities have been significantly written down after the firm’s energy wholesaler Orsted agreed to release a £30m guarantee back to the authority.
However, administrator FRP Advisory is still unsure how much of the authority’s remaining investment will be repaid.
Administrators have previously stated that the £18.8m loan Warrington Council gave to Together would be repaid in full but the level of realisations for the £18m of equity the authority pumped into the energy firm in 2019 – which the council has since adjusted to £8.8m – is unclear.
“There remains significant uncertainty around the potential level of recovery against the equity investment,” the update states.
“The administrators remain unable to provide a clear assessment or guidance. This is primarily because of a recent court judgment on the status of Ofgem claims and customer credit balances in the insolvency of a failed energy supplier.”
Warrington remains hopeful of a positive outcome, stating that Together is “well hedged” and has “significant cash balances based on collection of outstanding amounts from customers”. The council estimates its liabilities are likely to amount to just the £8.8m (adjusted) equity investment.
A Warrington Council spokesperson said: “It is important to allow the administrators to complete their work to ensure the maximum returns for all of the company’s creditors. We await the final outcome of the administration process to determine the final position.”
£36m of council tax payer money – wasted on “investments” that the council have no business getting involved in- this net zero nonsense is going to cost this country vat amounts of resources
By Stuart wood
This really isn’t good news. We’ve lost £18 million on a foolish investment which many flagged up at the time. I wrote to Cathy Mitchell but didn’t receive a response.
By Jim Sullivan