British Energy receives stay of execution

The UK government is to provide British Energy with a £410 million loan to allow the troubled electricity generator to stabilise its trading position in the UK and North America.

The UK government is to provide British Energy with up to £410 million to allow the troubled electricity generator to stabilise its trading position in the UK and North America.

British Energy initiated discussions with the government on 4 September with a view both to seeking immediate financial support and to facilitate discussions about a possible longer term restructuring to take place.

The short-term loan has been put in place until 27 September 2002, pending clarification of the company’s full financial position. No decisions have been taken, and no commitments have been given, about support beyond this period.

The board of British Energy has said via a statement that discussions regarding longer term restructuring will commence shortly and that there are ‘reasonable grounds for believing that these discussions will be successful.’

However, the board cautioned, ‘if these discussions are not successful, the company may be unable to meet its financial obligations as they fall due and therefore the company may have to take appropriate insolvency proceedings.’

Friends of the Earth is urging the government to put British Energy into liquidation. The environmental pressure group has today published a new report suggesting that climate change can be tackled without the building of any new nuclear power stations in the UK.

‘Our report shows that new nuclear power stations are not needed to tackle global climate change,’ said Bryony Worthington, nuclear campaigner at Friends of the Earth.

‘Nuclear power is uneconomic, unsafe and deeply unpopular. The government must take heed of British Energy’s financial crisis and not waste any more of the taxpayers money on this outdated technology. Instead it must look to the future and invest in clean, safe renewable energy.’