KPMG and E&Y appointed to revive TXU
KPMG and Ernst & Young have been appointed administrators for the UK subsidiary of TXU after the US power company failed to pay its debts due to the slump in the energy sector.
Phil Wallace and Jim Tucker of KPMG and Roy Bailey and Alan Bloom of Ernst& Young were appointed administrators to TXU Europe by the High Court yesterday following a petition from the company directors. TXU currently owes creditors more than £2.9bn.
The administration came after AES, the owner of Britain’s biggest power station at Drax in Yorkshire, terminated its long-term contract to supply 60% of its output to TXU. The contract collapsed when TXU failed to pay £50m for October’s supply
TXU is the latest victim of the weakened energy industry, which has been suffering since its privatisation in March 2001. Overcapacity and too much fierce competition are the main ailments of the beleaguered sector, causing electricity prices to plunge more than 40%.