A specialist energy supplier servicing the lettings sector has missed a £14.4m payment and is looking to merge with a so far un-named company.
Spark, which sells its utility packages through letting agents to whom it pays commission, missed its renewables obligation payment due at the end of October.
The company – which says it is a profitable £23m turnover business – said that it has met all its payments in previous years, and that it missed it this year “in common with an unprecedented number of other suppliers”.
It said that the payment has been deferred pending discussions with Ofgem.
Chief executive Chris Gauld, who led a management buy-out of Spark in 2016, said: “There is little doubt that these are difficult times in the industry.
“We’ve built up a strong, growing energy business over the past 11 years.
“However, the UK Government’s announcement in September that it was capping domestic energy bills at £1,137 a year based on a typical dual fuel customer has caused chaos in the industry.”
Gauld revealed Spark had been in discussions with a “number of other energy companies” in recent weeks.
He added: “As a result, we are now in merger negotiations with another medium-sized UK energy supplier and both of us believe this offers a long-term solution which would create a sustainable business of scale. However, we are taking nothing for granted.”
Gauld predicted that the price cap could force other independent entrants to the energy sector to the wall.
Spark works with letting agents to sell energy and broadband packages to tenants.
It currently has some 500,000 customer accounts and employs over 400 staff at its Selkirk headquarters.