Struggling energy broker Utilitywise called in administrators two weeks after putting itself up for sale amid mounting financial troubles.
The firm pulled the plug after saying it had been “unable to raise sufficient funding to cover trading losses and implement the turnaround strategy required”. It also said it had not received any offers to buy either the enterprise division or the company as a whole. Other parts of the group are still up for sale but dozens of workers at the firm claim that hundreds of people have lost their jobs at the company’s Headquarters.
Utilitywise which was launched in 2006, said at the end of January that it desperately needed £10m to finance a new turnaround strategy with its bank only renewing its lending facilities if it had funding in place to pay for those plans. The major employer had around 1,000 employees, though this was a big reduction from the 1,600 employees logged in accounts a year ago.
Utilitywise founder Geoff Thompson had been hoping to rescue the firm with what he described as a “very credible” rescue package. Shares in the firm were suspended on February 1 at 1.9p. At their height in 2014 shares reached 370p.
A number of Utilitywise employees took to social media after the announcement at the company, with one saying: “The very best of crack finding out that your not getting paid the 3k you were supposed to be at the end of the month and the company has gone administration.”
Another said: “Jobless now, thanks Utilitywise plc.”
Ulitywise has been plagued by a number of issues over the last year. It was forced to repay £7.6m to an energy company after discovering levels of under-consumption in some of its older contracts. The firm was twice forced to delay the publication of its financial accounts and suspend trading of its shares while an independent auditor reviewed its accounting methodology.
A statement released by the company said: “On 13 February 2019, Andrew Johnson and Chad Griffin of FTI Consulting LLP were appointed as Joint Administrators of Utilitywise Plc (“UTW”). UTW is the AIM-listed holding company of the Utilitywise Group (“the Group”), and the trading entity for the Group’s Enterprise division, which provided energy and utility brokerage services to micro-market and SME businesses customers.
“After extensive discussions with the Group’s largest shareholders and other stakeholders, the directors of UTW were unable to raise sufficient funding to cover trading losses and implement the turnaround strategy required by the Enterprise business. Furthermore, the formal sale process for the Group announced by the board on 28 January 2019 did not result in any offers to acquire the Enterprise division, or the Group as a whole.
“Consequently, the directors of UTW sought the appointment of Administrators at UTW. The Administrators have taken the decision to cease trading for the Enterprise division immediately, but are continuing the sales process for UTW’s subsidiary companies.
“All other group entities remain outside of an insolvency process and continue to trade as normal.”
Following his appointment as administrator, Andrew Johnson said: “Given the absence of a potential purchaser for the Enterprise division and the continuing significant losses within that part of the business, we are unable to continue to trade, and will cease the operations of the Enterprise division immediately. This will unfortunately result in a substantial number of redundancies, primarily at UTW’s head office in Newcastle.
If your business or anyone you know has been affected by these events, please do not hesitate to contact us to see if we can advise or help in any way.
Email or call Dawn 0114 2295 951