Troubled UK Nuke Firm in Canada Asset Sale Talks
12:56 GMT-05:00 Friday, November 15, 2002
LONDON - British Energy Plc , the privatized nuclear power firm surviving on a UK state loan, confirmed on Friday it was in talks to sell its 82 percent stake in the Canadian nuclear power project, Bruce Power.
Canadian uranium producer Cameco Corp , which is British Energy's partner through a 15 percent stake in Bruce, said earlier this month it was in talks with British Energy to buy the troubled company's holding.
On Friday Cameco confirmed the talks were ongoing. It has first right of refusal on the stake.
British Energy did not name a potential buyer, but Executive Chairman Robin Jeffrey confirmed the interest of Cameco at a recent shareholders meeting, where he said "all aspects of the business" were under review.
British Energy's said on Friday if it did sell the stake, the proceeds would first be used to repay funding from the government under its credit facility.
"It's a shame they may have to sell the most viable part of the business," said Fraser McLaren, analyst at ING, who estimates that British Energy's Bruce stake could be worth between 600 and 800 million pounds (US$950 million-US$1.26 billion) including attached debt.
This may be enough to repay the government loan, which currently stands at about 650 million pounds and expires on November 29, but it would be unlikely to solve the company's long-term viability problems.
British Energy went cap in hand to the British government in September because UK power prices have fallen below its cost of production. The firm produces more than a fifth of the nation's power, and the government cannot abandon it completely for safety and security of supply reasons, and because state-owned BNFL nuclear fuel reprocessing firm relies on it as a customer.
Nevertheless some competitors and anti-nuclear campaigners say the company should be allowed to fall into insolvency. |
