Gazprom UK unit narrowly avoids insolvency
Gazprom Marketing & Trading (GM&T), the Russian giant's London-based international office, could enter insolvency next month after several key contracts were cancelled in light of Russia's invasion of Ukraine, Reuters reported March 23.
The company narrowly escaped becoming insolvent in March by meeting a key monthly payment deadline, according to Reuters.
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GM&T includes branch offices in the UK, Switzerland, Singapore, France and the US. Trading as Gazprom Energy, the GM&T subsidiary serves more than 100,000 sites across the UK, France and the Netherlands.
UK-based Centrica, Germany's E.ON and Norway-based Statkraft are among the electricity utilities to have cancelled deals with the company.
The news comes as the UK trading brand continues to face a run on its long-term contracts, particularly with large corporations and public-owned bodies. McDonald's, Siemens, waste management services firm Biffa, several UK local governments and — on orders from UK health secretary Sajid Javid — the National Health Service, are all seeking to break off contracts with the unit, according to media reports. UK trading brand Gazprom Energy serves 20% of the country's commercial gas demand.
Many Gazprom Energy deals run years into the future and UK public sector bodies paid an estimated £107mn ($141mn) on its services last year, the i newspaper reported March 9. The division holds a UK electricity supply licence and is considered too big to fail.
UK regulator Ofgem is preparing a contingency scheme to bring the division into state-funded special administration. Gazprom Energy is considered too large to be wound up using the UK's standard procedures.