Cameco: No Immediate Plans To Increase Stake In Bruce Pwr
CALGARY - Cameco Corp. (T.CCO, CCJ) said Monday that buying out British Energy PLC's majority interest in nuclear generator Bruce Power isn't an option - yet.
Cameco, the world's largest uranium miner, hasn't discussed increasing its 15% stake in Bruce Power with cash-strapped British Energy to date, spokesman Jamie McIntyre told Dow Jones Newswires.
"Whether Cameco will get to participate further with Bruce Power, well, that's down the road a piece," McIntyre said, from Saskatoon, Saskatchewan.
British Energy, which owns 83% of Bruce Power, was granted a GBP410 million government reprieve in loan guarantees until the end of the month, after warning the company would become bankrupt without immediate help.
Monday's facility agreement allows British Energy to stabilize trading agreements until longer term measures can be found.
The U.K. government also required financial guarantees from several British Energy units, like Bruce Power, and subsequently Cameco.
Although Cameco saw its stock fall 4% to C$29.40 Monday on the fallout, it pledged to continue its commitment to invest up to C$100 million in Bruce Power and provide up to C$102 million in financial assurances.
The mining company recovered its initial C$42 million investment in Bruce Power's fuel inventory months ahead of schedule, and has invested another C$70 million to date.
"The partnership is still excellent," McIntyre said. "We are pretty confident that British Energy will be able to solve its short-term and long-term financial problems, and we will proceed as previously planned."
The energy giant credits low electricity prices and poor long-term contracts to pushing it to the brink of bankruptcy this year.
Responding to Canadian regulators' concerns, Bruce Power will present its financial credentials Thursday in Ottawa at a previously scheduled public hearing.
Quarterly updates are required as a lease requirement of its Bruce A and B facilities in southwestern Ontario, but the commission requested a new update on the company's ability to operate financially for six months, should the Bruce facility have to shut down.
"What happens to the standing of the lease, we just don't know," mining analyst Greg Barnes, with Canaccord Capital Corporation, said.
"There's nothing wrong with Bruce Power itself," Barnes continued. "But there is a lot of uncertainty with British Energy, and the (British) government help is a short-term, band aid measure."
The power giant's distress caused visions of Enron Corp.'s demise to taint its financially stable unit Bruce Power's standing in North America.
Like traders in the U.K. with British Energy, traders in Ontario's power markets were swift to distance themselves from Bruce Power, which supplies 15% of the province's energy needs.
Most traders polled by Dow Jones Newswires said they had no direct exposure to Bruce Power.
"Credit woes are pretty well epidemic in the industry," one trading executive said. "But there are a lot of implications for Bruce if British Energy goes down."
Bruce Power spokesman Steve Cannon said the company has been "in constant contact" with customers, and that Bruce Power has been fulfilling all of its contract requirements. |
