Doomed Portsmouth council-run Victory Energy still had interested bidders this year

As reported, Victory Energy Supply Ltd (Vesl) is set to be wound down after an appropriate buyer could not be found - losing Portsmouth City Council around £3.5m.

Vesl was established under the authority's Conservative administration, led by Councillor Donna Jones, before being scrapped by the Lib Dem-run council in November 2018 after the venture was deemed too risky.

However, letters released to the public for the first time between the director of Vesl, Chris Ward, and council leader, Cllr Gerald Vernon-Jackson, show a potential bidder 'provided an offer to acquire Vesl' in June this year.

But in September it was reported that the bidder - known as bidder I - confirmed its interest in the acquisition 'was on hold.'

The letter also showed a bidder - referenced as bidder H - had 'signed detailed heads of terms for the acquisition of Vesl' on February 5 this year.

Just a day later it withdrew over concerns that Ofgem were set to revoke its supply licence, which happened on March 25.

However, Cllr Steve Pitt, the council's deputy leader, explained that bidders were offering to set up a joint venture with Vesl - rather than buying it outright.

He said: 'Nobody was offering a sum of money for Vesl.'

SEE ALSO: Ofgem revokes licence for Victory Energy

And as previously reported council leader, Cllr Vernon-Jackson said only ‘non-profitable’ shares were offered.

The letter from Mr Ward, dated November this year, confirmed that as a result the proceedings for a creditors voluntary liquidation were due to commence.

It said: 'Given the current circumstances described above Vesl has now ceased all spending with the exception of the costs of holding and maintaining the data and information for Vesl by the external IT provider whilst its transfer to Portsmouth City Council is in progress.

'These contracts have a three-month notice period and amount to £1,100 per month.'

Prior to this operations to keep Vesl running to a minimum to attract a buyer cost between £2,000 and £3,000 a month.

As an insolvency practitioner will now be appointed by the Vesl board.

Speaking to The News Mr Ward said: 'The shareholder (the council) has agreed there will be no continuation of funding for Vesl.

'Therefore, the Vesl board will proceed to appoint an insolvency practitioner to administer the process of winding up the company.'

The letters will be discussed at a cabinet meeting tomorrow.