Portsmouth City Council has announced it is finally pulling the plug on Victory Energy, after it failed to find a buyer for the company.
The local authority has confirmed that ‘preparations are now being made to close down the company’, which has never traded or had any customers.
Victory Energy was first launched in 2017 by the-then Conservative administration with the aim of providing residents with low-cost renewable electricity and to generate money for the council.
But the following year, a new Liberal Democrat administration decided to cut its losses and not proceed with the venture.
A report by PwC into the business case for Victory Energy, which was published in August 2018 concluded it could require up to £15.2m of taxpayers money to get up and running and warned it would not be able to pay it back for up to eight years.
Speaking last year, the new Liberal Democrat leader of the council, Cllr Gerald Vernon-Jackson said they had taken the decision to abandon the plans ‘to limit the council’s losses and make sure no further money goes the same way’.
In November, a decision was made for the council to sell off Victory Energy and since then it has followed an extensive process to sell the company.
According to the council, it received offers from two parties to buy the energy supplier.
In a statement, it said one was not acceptable to the council as it still ‘exposed it to substantial further financial risk’.
The council said the other one was being progressed ‘until recently’ when the buyer withdrew to pursue an alternative investment.
Portsmouth City Council has now given notice to the directors of Victory Energy that its financial support for ongoing business operations will cease and will now work with them to support a managed wind down of the company.
The company’s nine employees have been given redundancy notices and the consultants supporting the business have also been given their termination notices.
The council added that it intends to assist Victory Energy to fund the termination entitlements of the staff and provide them with access to an employee assistance programme.
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