Market conditions lead to strategic review at Yorkshire-based business energy supplier CNG
The Yorkshire-based business energy supplier CNG has appointed advisers to consider its options during a period of soaring prices.
The Harrogate company, which is backed by Anglo-Swiss trading giant Glencore, is a gas supplier for SMEs (small and medium-sized enterprises) and also provides shipping services.
According to Sky News, the advisers will run a process that could involve a break-up or outright sale.
CNG has 50,000 customers and employs around 200 people.
Paul Stanley, the company's CEO, told The Yorkshire Post: "CNG remains solvent but market conditions have prompted a strategic review."
Mr Stanley confirmed that Interpath Advisory has been appointed to help with that evaluation.
Earlier this month, Mr Stanley said that costs faced by gas suppliers have tripled since last year, so customers can expect higher bills this winter.
Speaking as the gas crisis prompted questions in parliaments across Europe, Mr Stanley, said: “As a shipper and supplier of gas, CNG is aware of how challenging the current energy market is for suppliers and end users.
“Wholesale gas prices are at a record high due to factors which are out of the hands of UK energy businesses. These factors include: the prolonged winter weather conditions across Europe which drained storage earlier in the year; warmer summer weather increasing gas demand as hydro and wind generation declined; fewer liquefied natural gas (LNG) tankers entering Europe due to Asia paying higher prices; a Norwegian pipeline closed; and stored gas ahead of winter remains lower than anticipated.
“These challenges are impacting the entire industry and will flow through to energy bills. Costs are around 300% higher than last year and there’s no doubt this will continue to impact the viability of many suppliers - something we are already beginning to see unfold.”
CNG Energy is a business-to-business energy firm. Last year, it reported revenues of £559m, with post-tax profits of £5.3m.