October 25, 2021

Glencore-backed CNG underpins deepening energy crisis as it seeks bids within days

October 13, 2021

A commercial energy supplier backed by Glencore, the FTSE-100 commodities trading giant, is seeking bids for its commercial supply arm within days, underlining the widening nature of the crisis engulfing the sector.

Sky News has learnt that advisers to CNG Group are seeking offers for the arm of its operations which directly supplies more than 40,000 small and medium-sized businesses by the end of the week.

News of the bid deadline comes as CNG prepares to withdraw from the gas wholesale market, telling its commercial customers on Wednesday that it would no longer facilitate the supply of gas to them.

Sources said CNG was working with legal and accounting advisers to prepare the wholesale business for an insolvency process.

An insolvency practitioner is likely to be appointed early next week, given the impact on CNG's finances of recent utility collapses.

CNG has in the past acted as the shipper to energy suppliers such as Bulb and Octopus Energy, although its remaining domestic supply customers are understood to be much smaller.

A number of the utilities which it acts as the shipper for have collapsed in recent weeks as the energy crisis has engulfed the British residential market.

In a letter to customers seen by Sky News, CNG chief executive Paul Stanley said: "The past few weeks in the energy market have been unprecedented.

"Market volatility has caused many suppliers to exit the market in a short space of time, causing a significant amount of financial damage to CNG.

"We expect more suppliers to fail in the coming weeks, further compounding the issue.

"We have been exploring options to sustain CNG's shipping services, but it is with regret that I have to inform you that we do not have any further option but to exit CNG's wholesale business."

Sky News revealed recently that CNG had hired Interpath Advisory to undertake a rapid strategic review.

Glencore, which ranks among Britain's biggest listed companies, is "a long-standing supplier [to] and shareholder in the group", according to CNG's most recent set of accounts filed at Companies House.

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