Time running out for British Energy

Manufacturing News, Source : TheManufacturer.com
Published : 19 Nov 2002 9:45

British Energy has only 12 days left before its £650m government loan runs out.

The company’s current plan is a debt-for-equity swap, which relies on the idea that creditors view British Energy’s stock as being valuable. One way for British Energy to survive is for the government to intervene with decisions such as tax reductions on nuclear generation.

Since the financial problems were discovered this year negotiations between executives, the government and investors have taken place but a successful plan to save British Energy has yet to be made. The government wants finances restructured so that major creditors receive shares in the company instead of debt repayments. This doesn’t guarantee a secure future for British Energy though and creditors maybe unwilling to take shares in a business that looks unstable.

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