British Energy Seeks Financial Help
British Energy Seeks Government Support After Sharp Drop in Electricity Prices
LONDON -- British Energy, the former state company that produces a fifth of the nation's electricity, has asked the government for financial help after being hit by a sharp drop in electricity prices, the government said Thursday.
Shares in British Energy were suspended from trading on the London Stock Exchange.
The company, privatized in 1996, has eight nuclear power stations in Britain and employs 5,200 people in the United Kingdom. Earlier this year, it reported full-year losses of nearly 500 million ($780 million).
The Department of Trade and Industry issued a statement saying the British Energy board had begun talks with the government "with a view both to seeking immediate financial support and to enable discussions about a possible longer-term restructuring to take place."
"British Energy asked us for help," a department spokeswoman said on customary condition of anonymity.
"We don't believe there is any threat to safety and security of supply but we are prepared to act to ensure safety and security of supplies are maintained," she added.
British Energy said that if the talks were not successful it might have to take "appropriate insolvency proceedings."
Shares closed trading at 80.75 pence ($1.27), valuing the firm at about 500 million pounds ($780 million). Three years ago shares were traded at more than 700 pence ($10.97).
A drop in electricity prices and technical problems at the power stations have seen the group's shares slump over the past month.
A week ago British Energy confirmed it was in talks with state-owned British Nuclear Fuels to take over running the firm's Magnox reactors, which was regarded as a potential short-term help for British Energy.
British Energy said Thursday that British Nuclear Fuels had delivered its formal proposals to the group and the terms offered "fell short" of those required.
"Having reviewed the longer term prospects for the business, the board has concluded that we had no alternative other than to seek Government support," executive chairman Robin Jeffrey said.
The group's stock plunged last month after it disclosed that problems at a plant in Scotland |
