UK announces 4.5 bln-pound funding facility for energy firm Bulb's takeover

Britain's PM Johnson and Chancellor of the Exchequer Sunak visit Octopus Energy, in London
Britain's Prime Minister Boris Johnson and Britain's Chancellor of the Exchequer Rishi Sunak visit the headquarters of Octopus Energy, in London, Britain October 5, 2020. Leon Neal/Pool via REUTERS

LONDON, Dec 21 (Reuters) - Britain will provide up to 4.5 billion pounds ($5.44 billion) to help fund Octopus Energy's takeover of collapsed energy supplier Bulb and related energy purchase hedging costs, the government said on Wednesday.

The acquisition, approved by the Department for Business, Energy & Industrial Strategy (BEIS) in October, closed just before midnight on Tuesday despite a legal challenge by rival suppliers E.ON, British Gas and Scottish Power.

The extent of government support to Bulb could eventually be less than 4.5 billion pounds, depending on energy prices this winter, BEIS said in a notice published on Wednesday.

The funding will be repaid to the government by September 2024, the notice added.

Bulb, which had around 1.5 million domestic customers, was one of the largest energy suppliers to collapse last year due to soaring wholesale gas and electricity prices.

($1 = 0.8265 pounds)

Reporting by Sachin Ravikumar, editing by Paul Sandle

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