A thousand TXU jobs in the balance
A THOUSAND jobs in Ipswich today hung in the balance as two of the biggest names in town were involved in a bizarre race to make the news.TXU Energi is expecting its retail division – with 5.
A THOUSAND jobs in Ipswich today hung in the balance as two of the biggest names in town were involved in a bizarre race to make the news.
TXU Energi is expecting its retail division – with 5.5million customers – to be sold off at the same time as Ipswich Town is expecting to name its new manager.
"We don't know who will be the first to make a big announcement. Things are moving quickly here," said a source at TXU.
Meanwhile, Ipswich Town chiefs are drawing up a shortlist for the job of manager – and an announcement on that front could be ten days away.
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The two troubled organisations are linked by a sponsorship deal which sees TXU's name on Town shirts.
But that could all change next season.
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Bosses at TXU have received a number of inquiries about the business – and today British Gas owner Centrica confirmed it was "monitoring the situation."
City sources indicate that German power giant Eon – which owns Powergen in the UK – and Scottish Power are in pole position to take over TXU's retail business. But a late bid from Centrica could not be ruled out.
When the retail business is sold, TXU Corp – the American parent company – could then put the rest of the UK business into administration.
That side of the company buys power wholesale, and this is where the company has got into trouble over the last month.
Long-term deals to buy power at a relatively high price were signed before the price of power fell dramatically – meaning TXU has been unable to sell power on to its customers at a profit.
The price of shares in the American company fell again overnight, from $13 to $12 a share. On October 1, the share price stood at $40.
The 1,000 staff at Ipswich are being informed about the latest turn in events through the company's intranet and by regular meetings with senior bosses.
The head of TXU's UK operation, Paul Marsh, is also recording regular voicemail updates which staff can ring up and hear.
"It is unsettling for people, but we are doing all we can to keep them up to date with the situation," said a company spokesman.
Ipswich Town is not due to receive the next instalment of its sponsorship payment until next May, by which time the retail business will almost certainly have been sold.
The sponsorship deal will almost certainly be included in that sale because it is seen as a highly effective form of advertising.
However, it would undoubtedly mean that the name on the Town shirts changes for the second time in two years. The new owner is unlikely to want to retain the TXU name.
The football club operates a customer charter which prevents it changing its strip during the season. And it is likely that the new owner of TXU Retail will take a few months to re-brand all its customers – allowing the current strip to remain until the end of the season.
Ipswich Town is due to get a new home strip for next season anyway.