The German energy company Innogy has written down the value of Npower, its British supply business, by £428 million as it grapples with increased regulatory pressure, including government plans for a domestic energy price cap. Innogy, which was spun off from RWE last year, said that the impairment charge had come after an annual review that pointed to a “deterioration in commercial assumptions and tougher regulatory conditions” in its British division. The announcement came only days after Innogy had announced plans to merge its UK retail supply business with that of SSE, a competitor. The deal will reduce the “Big Six” companies that dominate the domestic energy supply industry to five, raising concerns about weaker competition in the market. The new UK-listed business will have a total of 11.5 million customers, with Innogy taking a 34.4 pe r cent stake. SSE will retain the remaining 65.6 per cent of the shares. Innogy said that there was a “difficult situation” in the UK market, which it has been trying to quit for several years. It said that “pressure on margins is very high”. The German group has pledged to retain ownership of its chunk of the new listed business for at least six months, but in the longer term the deal with SSE will offer it a chance to exit the British arena.

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Published: 14 November 2017