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Bulb was placed into ‘special administration’ last year after it said it was no longer able to withstand record wholesale gas and power prices © FT montage/PA

Administrators of Bulb Energy, the UK energy supplier bailed out by taxpayers last year, are preparing to appoint Lazard to handle the sale of the business, according to three people familiar with the situation.

Bulb was placed into “special administration” in November after regulators deemed it too large to process via the energy industry’s normal mechanism for distributing the customers of failed suppliers to rival companies.

The group was Britain’s seventh-biggest supplier, with 1.5mn customers, and had to admit to regulators last year that it was no longer able to withstand record wholesale gas and power prices.

The company was the first in the energy industry to be placed into special administration and its working capital is being supported by a £1.7bn government loan. The process is being run by Teneo.

Lazard was set to be called back in partly because it was familiar with Bulb’s business, one of the people said.

The investment bank last year sought to find Bulb new investors and to sell it to a rival but the process came to nothing as wholesale gas prices, in particular, continued to surge. At least 27 UK energy providers have collapsed since the start of August.

Lazard will now seek to rekindle interest in the business. Rivals including Centrica, Ovo Energy and Octopus all ran the rule over Bulb during last year’s sales process.

Those efforts to find a buyer were abandoned in November after potential bidders indicated they were no longer willing to invest in or acquire the company “on a solvent basis”, according to documents sent to creditors in January.

Teneo told creditors in January that a sale or rescue of the company “might not be possible until spring 2022”, although industry experts said this was optimistic given current conditions in the energy retail market.

Reports published by Teneo and administrators for Bulb’s parent company Simple Energy in recent weeks have shown the company owed £254mn to customers when it was rescued in November using a taxpayer loan. The reports also highlighted flaws in Bulb’s hedging strategy that led to its collapse.

Court documents filed in November on behalf of Ofgem, the UK energy regulator, showed that the £1.7bn taxpayer loan was not the cheapest option available to rescue the energy company. Transferring the company’s customers to another provider under the so-called supplier of last resort scheme would have cost £1.28bn.

Teneo and Lazard declined to comment.

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