Octopus Energy is close to finalising a takeover of collapsed rival Bulb at a cost to the British taxpayer of £4bn.
Industry sources claimed Bulb’s special administrator is preparing a binding agreement to sell the company by the end of this month, with a targeted completion date of December.
Treasury ministers and the Department for Business, Energy and Industrial Strategy (BEIS) said selling Bulb’s 1.6mln customer base is the best outcome.
The government has already spent billions buying gas to supply its customers after Bulb failed to hedge its purchases.
"Under public ownership, Bulb has been unhedged and will have cost the taxpayer billions,” according to one energy industry expert.
If Octopus acquired Britain’s former seventh-largest energy company’s customers, its client base would rise to roughly five million.
Octopus plans to repay £1bn of the government funding over a number of months, sources close to the deal said.
It will pay between £100mln and £200mln, with a separate profit-share agreement in place with the government to give it a return for many years from Bulb customers.
Bulb is reportedly losing approximately £5mln each day due to the failure to hedge gas purchases.