Ovo Energy has confirmed it has entered into a conditional agreement to acquire Spark, the operating company of Spark Energy, after its supply arm ceased trading on Friday (23 November).
The supplier has also submitted a proposal to Ofgem to take on Spark Energy’s 290,000 energy customers as supplier of last resort (SoLR).
The SoLR is expected to be confirmed later today (26 November).
An Ovo spokesperson said: “Ovo Energy can confirm we have entered into a conditional agreement to buy the operating company of Spark Energy, and we have also submitted a proposal to Ofgem to take over their customers.
“We have been working with the management team in Selkirk to ensure Spark Energy jobs will be protected and customers’ services will not be disrupted.”
On 15 November it was announced Spark Energy had entered into merger negotiations with another energy supplier after missing £14.4 million in Renewables Obligation (RO) payments.
The company blamed rising wholesale costs and the government’s decision to introduce a price cap on energy bills for its failure to meet the 31 October deadline for late payments.
Last week it was announced Ofgem was investigating Spark Energy and Economy Energy over the non-payment.
Spark Energy’s chief executive Chris Gauld said in a statement on LinkedIn that it was “business as usual” for the supplier.
Gauld said: “Ready for a big week ahead. It’s business as usual for our 430 people delivering our digitally enabled multi utility service to home movers right across the UK. And we’re ready for a fresh start in energy.
“With a conditional sale to Ovo agreed we wait to see who is awarded the energy supply customer base and then we’re set to continue to build on what we’ve achieved to date. Our clients and customer’s service will remain uninterrupted.”
In a statement on its website Spark cited “tough trading conditions” as the reason behind the company being unable to continue to supply customers.
The statement said: “The part of our group which supplies gas and electricity to homes across the country – Spark Energy Supply Limited – will be unable to continue supplying customers due to increasingly tough trading conditions in the energy industry. Our other group companies are operating as normal.”
Ofgem revealed in October an “unprecedented” 34 suppliers collectively owed £102.9 million in buyout payments. They had until the end of the month to make late payments.
The regulator also recently announced a mutualisation process would be triggered for the first time ever after the outstanding payments following the final deadline exceeded a threshold known as the relevant shortfall.
It has now confirmed the level of the shortfall for the RO payments at £58.6 million, although the figure is subject to a review by an auditor.