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To: Taki who wrote (112156)	1/20/2003 3:04:58 PM
From: Taki	Read Replies (1) \| Respond to of 150070

BGY,British Energy Plan Is Best Option On Offer - Labour MP Monday, January 20, 2003 01:12 PM ET LONDON -(Dow Jones)- The U.K. government-backed rescue plan for beleaguered nuclear plant operator British Energy is the best option for both the country's taxpayers and the company's investors, a senior Labour member of parliament said Monday. But renationalization of the country's largest electricity generator remains a fallback alternative if creditors reject the plan next month, Chairman of the House of Commons Trade and Industry Select Committee Martin O'Neill told Dow Jones Newswires. "If nationalization is the only option, then on the grounds of safety and security of supply, the government has got to continue to run (the company)," O'Neill said in an interview. "But I think the government would prefer to have businesspeople run it than civil servants." A minimum of 75% of British Energy creditors must approve the plan by Feb. 14 for it to go forward. But a number of bondholders say they have reservations about the plan, which would cancel some GBP1.26 billion of debt and replace it with up to GBP700 million of new bonds and an unspecified number of new shares. The proposal would also divert some 65% of the restructured company's future net cash flow to a Nuclear Liability Fund designed to cover future plant decommissioning costs. O'Neill noted that the government has pledged to underwrite some GBP2 billion of decommissioning costs and to cover any shortfall through taxpayer funds, and said the restructuring plan would "reduce uncertainty" that would face both the company and its investors if British Energy is forced into administration. "I think it would be foolhardy of (investors) to take their chance with a debt settlement," he added. Moving on to the government's long-awaited energy policy review, which the government has pledged to release by the first quarter of the year, O'Neill said he expected the plan to be announced by Easter. Government officials originally signaled they were aiming to unveil details of the policy review by mid-February, but analysts and market participants have said they believe the deadline would be pushed back due to British Energy's woes. "I think (the deadline) will slip," O'Neill said. Parliament Web site: parliament.uk -By Andrea Chipman, Dow Jones Newswires; 44-207-842-9259; andrea.chipman@ dowjones.com Dow Jones Newswires 01-20-03 1312ET