Overview - Power play

British Energy FD Stephen Billingham has not been long in his job but already he has experienced as many ups and downs as the image of the nuclear power industry itself.

When the European Commission approved a government-backed £5bn rescue plan for the company a fortnight ago, he had been on the board less than a week. But before you could say ‘put the champagne on ice’, a shareholder rebellion threatened to push the company into administration. Shareholders are fuming because bondholders would get 97.5% of British Energy if the restructuring goes ahead.

The prospect of insolvency practitioners arriving to take over at nuclear plants including Dungerness, however, appeared to recede last week after an apparent climb-down by rebellion leader Polygon Investment Partners.

That has taken some of the urgency out of British Energy’s situation, but it still faces an extraordinary general meeting on 22 October where the remaining rebel shareholders aim to block its restructuring plans.

The spat has already drawn blood by forcing the company to apply for de-listing in an apparent attempt to head off the rebellion – a move that saw its stock tumble by as much as 29%.

The dispute has turned nasty, with British Energy warning shareholders who vote against the agreement that they could face significant claims.

Another danger comes from the government, which reserved the right to withdraw its support for the restructuring if there is a ‘material adverse change’ in British Energy’s position.

With so many hurdles to overcome, you might well have thought Billingham and his predecessor Martin Gatto could expect a pat on the back if the restructuring comes off successfully.

Instead the Public Accounts Committee has been busy pressing the DTI to make sure it is not a golden pat, since improvements in the finances will be at the taxpayer’s expense.

One MP described the possibility of the board receiving bonuses linked to such improvements as ‘grotesque, unacceptable and dishonourable’.

This unusual situation might be new to Billingham, but it is not the first time he has been called on to deal with a troubled company. He oversaw the successful financial recovery of WS Atkins, the engineering consultancy, as group financial director.

Billingham has over 20 years’ experience in senior finance positions, at BICC, Severn Trent and Burmah Oil. He also led the finance team that successfully closed the Metronet, the London Underground public private partnership, the largest to date.

That experience may stand him in good stead after the Office of National Statistics reclassified the privatised company as being in the public sector for accounting purposes. The government notified the European Commission of its intention to help fund the restructuring back in March 2003, but it was put on hold while the EC conducted an investigation.

Billingham will be hoping the company can put the last two years behind it, which began with its near collapse due to falling power prices.