Connect with us

Hi, what are you looking for?

World News

Ovo chief Stephen Fitzpatrick faces quiz over £27m loan

Wealth: Ovo boss Stephen Fitzpatrick

Ovo chief faces quiz over £27m loan: Energy firm’s billionaire founder refuses to answer questions about loan – and listeners raise red flag

  • Imagination Industries – owner of the Ovo group – has only two directors
  • One is the founder and CEO of billionaire Stephen Fitzpatrick
  • The other is CFO Vincent Casey
  • The loans were disclosed in Imagination’s latest accounts

Wealth: Ovo boss Stephen Fitzpatrick

Wealth: Ovo boss Stephen Fitzpatrick

The parent company of Britain’s third-largest energy retailer disbursed £27million in loans to its directors last year, new documents reveal.

Imagination Industries – owner of the Ovo group, which has 4.5 million energy customers – has just two directors. One is founder and CEO of billionaire Stephen Fitzpatrick and the other is CFO Vincent Casey.

The loans were disclosed in Imagination’s latest accounts, where separately its auditors raised concerns about the company’s borrowings.

Ovo represents the bulk of Fitzpatrick’s eclectic business empire. His interests include a flying taxi company listed in the United States and registered in the Cayman Islands. He also owns Kensington Roof Gardens in London, which was previously a party venue owned by Sir Richard Branson.

Fitzpatrick, a Belfast-born former city trader, launched Ovo as a challenger to the big six energy providers. Soaring gasoline prices and strained household budgets have raised concerns about his finances.

Earlier this year, Fitzpatrick was grilled by MPs for more than £40million in business-to-business loans and payments, which he said he did not acknowledge. They called on him to “open the books” to bring more clarity.

Documents for the year ending December 2021 show a loan of £27million was made to the directors of Imagination and settled through a share buyback. Terms of the loan were not disclosed. Fitzpatrick owns 100% of Imagination’s share capital.

Ovo declined to comment when asked the reason for the loan.

In addition, a loan of £3.75 million was granted to Kensington Roof Gardens by Imagination with an interest rate of 7%. Nearly £3million in loans have also been granted to Vertical Aerospace, Fitzpatrick’s flying taxi start-up.

Loaning £27million to the administrators is unusual, but there is no indication the loans broke financial rules or were illegal. Since launching Ovo in 2009 with a prize pool of £350,000, Fitzpatrick has amassed staggering riches. This allowed him to buy a Formula 1 team in 2015, although the business collapsed two years later.

He was investigated for withdrawing £2million from Ovo in 2013 – when the business was still in its infancy and at a loss – to pay for a house in the Cotswolds.

A leading accountant, who asked not to be named, said the directors’ loans were “not what you would expect from a company that caters to so many domestic customers”, adding that the balance sheet is “very low”.

In Imagination’s accounts, which were signed in late September, blue-chip accounting firm PricewaterhouseCoopers expressed “material uncertainty” about the group’s ability to continue operating.

The auditor said: “The group expects to breach financial covenants with trade creditors under the base scenario and severe but plausible downside scenarios that could allow counterparties to terminate these agreements or request additional collateral. ”

“If this were to happen, the group may not be able to secure alternative consideration to facilitate continued trading on a sustainable basis.”

High costs last year led Imagination Group to extend its credit facility to £30m, repayable in March 2023.

Ovo boss Stephen Fitzpatrick owns a mansion in the Cotswolds

Ovo boss Stephen Fitzpatrick owns a mansion in the Cotswolds

Imagination, which derives all of its revenue from the Ovo Group, had sales of £4.5bn and profits of £337m.

The Mail on Sunday revealed last month that Ovo had racked up losses of £300m in the three years to 2020. Imagination’s profits this time were due to a one-off £422m gain in collecting energy contracts.

The auditor’s warnings represent a more pessimistic outlook than Imagination’s previous annual report, which did not identify any concerns that would “cast significant doubt” on the group. They are also following a similar warning posted to Ovo’s accounts in September.

Questions can also be asked about Fitzpatrick’s attendance at Ovo’s board meetings. He missed two out of four rallies, so he was less present than any other director. The reason for his absences is not known.

Fitzpatrick was a strong advocate of state intervention when energy prices soared this year. He pleaded with ministers to keep people from being cold and hungry.

Ovo and Imagination declined to comment.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Business

When you apply for a personal loan, lenders first determine your credit score to know how credible and reliable you are. This means that...

Health

It’s fun to be a student, especially if you’re motivated to achieve. However, it’s getting harder for students to focus in today’s busy society....

Finance

Loans against property are a common option for people needing high-value cash. Given that its interest rates are almost 3% to 4% more than...

Business

Zion Market Research has released a new report that projects the Endotracheal Tube Securement Devices Market: Global Industry Perspective, Comprehensive Analysis and Forecast, 2018-2025. The year...