Another lifeline for British Energy
Beleaguered nuclear power generator British Energy has been thrown a lifeline by the government, as the £650m loan it was given in September, was extended until March.
Link: Government ponders fate of British Energy
The government granted the extension yesterday, and promised to underwrite British Energy’s multi-billion pound nuclear clean-up liabilities as part of the deal. However, no more money will be made available.
Trade & Industry secretary Patricia Hewitt told the House of Commons yesterday the government would help the beleaguered energy company to ‘attempt solvent restructuring’.
But Hewitt also dismissed the company’s executive chairman Robin Jeffrey, and hinted he would not receive a golden handshake.
She told the Commons Jeffrey should take note of the losses to taxpayers, shareholders and creditors when he negotiates his payoff.
The Financial Times estimated that shareholders could end up owning just 5-10% of the nuclear generator after the deal and some of British Energy’s larger lenders could lose up to 70% of their original investment.