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Gold/Mining/Energy : British Energy
BGY 5.840+0.2%Dec 24 4:00 PM EST
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To: Copperfield who started this subject9/9/2002 12:23:24 PM
From: Copperfield   of 25
 
UK Likely To Get EU Nod For British Energy Bailout
Monday September 9

BRUSSELS - The U.K. government looks set to receive at least a yellow light from European Union regulators for its bailout of troubled nuclear power generator British Energy PLC .
The British government over the weekend agreed to give a GBP410 million loan to the cash-strapped energy company. How the government money will be disbursed and spent has not yet been released.

"We will have to wait and see what are the details," said European Commission competition affairs spokesman Michael Tscherny.

The aid could either be considered rescue or restructuring. Either way, commission insiders say the deal should go through, though some conditions might be imposed.

If regulators consider it a rescue loan, the company would have to pay the money back within a year. The funds also could only be used to pay operating expenses and salaries.

Such loans have been used in several high profile cases such as former Belgian flagship carrier Sabena, French state-controlled bank Credit Lyonnais SA , or the U.K.'s Railtrack Group PLC . Officials expect the British government to use the rescue loan option in the case of British Energy.

If the loan is considered restructuring, however, it then falls under the terms of the 1957 Euratom treaty for nuclear power. The treaty doesn't ban state aid - in fact, it makes no mention of it - which leaves governments free to do what they want to support their nuclear industries.
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