Darling confirms plan to sell part of British Energy
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Your support makes all the difference.The Government confirmed yesterday it intends to proceed with a sale of part of its shareholding in the nuclear power generator British Energy.
Alistair Darling, the Trade and Industry Secretary, said the sale would take the form of a "capital markets transaction", although it is thought that EdF of France and possibly Eon of Germany could be interested in taking a stake in British Energy.
No details were given on the timing of the sale or the amount that would be sold off. But it is thought the Government will sell at least one-third of its stake, which would raise about £2bn.
The proceeds will be ploughed back into the Government's Nuclear Liabilities Fund to help pay for the costs of decommissioning British Energy's eight nuclear stations and dealing with spent fuel.
British Energy was saved from collapse three years ago after the Government agreed to relieve it of £5bn in nuclear liabilities in return for a 65 per cent shareholding. In the subsequent refinancing, existing shareholders were all but wiped out as creditors swapped their debts for equity.
The Government shareholding is currently worth about £6bn, having risen sharply in value as British Energy shares have soared on the back of rising wholesale electricity prices.
One option would be for the Government to get rid of its entire stake and use the proceeds to cover the entire liabilities it inherited from British Energy. But this would involve the biggest secondary share sale ever seen on the London market and appears to have been ruled out on grounds of practicality.
The Government has already raised £3bn by selling British Nuclear Fuels' US business, Westinghouse, to Toshiba of Japan and is likely to net a further £300m-£500m when BNFL's British Nuclear Group is privatised next year. British Energy shares closed down 7p at 690p, valuing the 35 per cent of the company quoted in the London Stock Exchange at a little less than £4bn.
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