2 September 2002 – A report in The Sunday Telegraph says that UK nuclear power generator British Energy is considering selling some of its North American nuclear generation assets, worth between $1.5bn and $2.3bn.
British Energy, which generates a fifth of Britain’s electricity, has been affected by low wholesale electricity prices, which have fallen to below the company’s production costs, and shutdowns at two of its UK plants. The paper said the proceeds of a sale would help shore up the firm’s finances.
It said the company’s board had also discussed splitting the group into two separately listed companies on either side of the Atlantic, but had concluded that the UK business would not be viable on its own. British Energy reused to comment on the speculation.
The company has to pay back more than £450m of loans, the first due in March. Any sale of assets in the US would alleviate such financial difficulties in the UK.
The paper also said British Energy was expected to announce within the next few weeks that its chief executive and chairman, Robin Jeffery, would split his roles. It said finance director Keith Lough was among the front runners for the job.
The spokeswoman said Jeffery had made no secret of the fact that his roles would be split by the end of the financial year to March 2003.
She added that the company was making good progress in recruiting a chief executive and was looking both internally and externally, but there were no front runners yet.
The UK government is aware of the difficulties facing British Energy and is anxious to avoid a collapse sparking comparisons with the failure of UK rail system operator Railtrack. Recent newspaper reports suggest that Prime Minister Blair is under pressure to reverse Labour’s traditional opposition to replacing Britain’s ageing nuclear power generation capability which would provide a boost to British Energy.