Energy supplier Npower had £427m wiped off its value last night – as it prepares to merge with a rival.
German parent Innogy slashed the firm’s value by 10.5 per cent to £3.6bn, and said they did not expect it to make a profit this year.
Announcing the write-down yesterday, Innogy bosses said: ‘This impairment reflects the deterioration in commercial assumptions and tougher regulatory conditions.’
Last week Innogy revealed plans to merge Npower with rival SSE’s retail arm and list the new entity on the stock market. It said the planned tie-up had not affected the decision to cut the business’s value.
SSE declined to comment, saying Npower remained a competitor for now.
The merger would create a business with a 24 per cent share of the electricity markets and 19 per cent share of gas.
Yesterday, Innogy said it had added 47,000 customers in the third quarter but noted that some customers could only be kept by cutting bills – denting profits.
Overall losses at Npower over the nine months to the end of September widened to £90m, compared to a £72m loss during the same period last year.