British Energy faces administration despite creditor deal
Embattled nuclear generator British Energy may still go into administrator despite reaching a £2bn debt-for-equity agreement with its creditors.
Although the company yesterday signed a deal giving its creditors 97% of the company, trade secretary Patricia Hewitt said the government could still pull the plug on the company if ministers do not think British Energy is viable or if the European Commission blocks state aid.
Administrators from KPMG will remain on standby until September 2004, when the European Commission decides whether the agreement constitutes illegal state aid.
If the company’s position deteriorates again, the government has made sure it can buy back the nuclear generators for just £1 each, according to an article in The Times.
Hewitt said: ‘If any of the restructuring conditions are not met, the government has contingency plans ready for the administration of the company.’
British Energy has been dangling on the edge of administraton since September 2002.