Government ponders fate of British Energy
The fate of British Energy looms in the balance today as the government decides whether to extend a £650m loan to save the beleaguered giant from administration.
The government has until tomorrow to determine if it will grant the energy company the loan, approved by the European Commission, with the condition that the debt be repaid within a year.
According to the Financial Times, the Commission also raised the ceiling for any further aid to £1.1bn yesterday.
The Commission said: ‘It is necessary for nuclear safety reasons to keep British Energy alive until a permanent solution is found.’
An estimated £899m is required to keep the embattled energy giant afloat and allow KPMG, rumoured to be helping British Energy, to negotiate a restructuring. A further £276m is thought to be needed to cover ‘unspecified contingents’.
British Energy, which supplies the nation with the majority of its electricity, has succumbed to the 45% drop in energy prices due to over-capacity and fierce competition in the sector.