Ovo investors raise stakes after ‘challenging’ year with £1.3bn loss
Ovo investors raise stakes after ‘challenging’ year with £1.3bn loss
Two investors in Ovo, Britain’s third largest energy supplier, have raised their stakes after it lost £1.3bn last year.
Mayfair Equity Partners and Morgan Stanley Investment Management have increased their holdings by an undisclosed amount, in transactions worth £200 million.
Ovo’s huge loss compares to a £335m profit for 2021. It followed what it said was a ‘challenging’ year for the industry.
The slump was mainly due to the impact of its hedging strategy – whereby it pre-purchases energy at a fixed price to ensure supply in volatile markets. Ovo insisted this had “no cash impact” and “would be reversed in future periods.”
Raman Bhatia, CEO of Ovo’s retail division that supplies energy to about 4 million homes, said the investment by Mayfair and Morgan Stanley underlined the company’s “growth potential.”
Raising the stakes: Mayfair Equity Partners and Morgan Stanley Investment Management have increased their stake in Ovo by an undisclosed amount
The investment implies a reduction in stake in the company owned by billionaire founder Stephen Fitzpatrick, and comes after a turbulent period for the wider industry, with 30 suppliers having collapsed due to volatility caused by the Russian invasion of Ukraine.
That led to the government subsidizing all household energy bills between October 2022 and this month.
Fitzpatrick founded Ovo in 2009 after a career as a trader at City. The Sunday Times Rich List 2023 claimed him to be worth £2.2 billion.