British Energy plc, is the United Kingdom's primary nuclear power producer, operating seven advanced gas-cooled reactor stations, one Pressurized water reactor site and one coal fired power plant. BNFL, Britain's other nuclear power producer, is currently decommisioning its eight Magnox power plants in a process which is to be completed by 2010.

British Energy was privatised in 1996, taking possession of the attractive part of the UK's nuclear power generation capacity. The less attractive Magnox reactors were put under the control of the newly formed Magnox Electric plc which was later integrated with BNFL on January 30, 1998. The sale of British Energy netted £2.1Bn.

British Energy has been in financial trouble since 2002 following a slump in wholesale energy prices when it first approached the British government for financial aid. Parties to the resulting talks included bondholders, significant but unsecured creditors, power purchase agreement counterparties, and a group of secured creditors known as the Eggborough banks, because they provided financing for the purchase of the Eggborough coal-fired power plant from National Power in 2000.

The plan that resulted from these talks would nearly eliminate any equity interest by existing stockholders, as the firm's creditors waived over £1Bn of debts in return for control of the company. Shareholders would receive only 2.5% of the shares of the new company.

A hedge fund, Polygon Investment Partners LLP announced in July 2004 that it has an alternative plan, and it has since sought to block the government’s negotiations. It believes that the proposed restructuring violates the rights of shareholders under the law of the European Union and under the UK Human Rights Act of 1998.

On September 22 2004 the UK government's investment of over £3Bn in the restructured firm was approved by the European Commission. On September 24 the company was reclassified as a public body in what the Office of National Statistics described as a reflection of "the control that can be exercised by government over British Energy." This move was described by The Times as a de facto privitisation of the group.

External links

• British Energy (http://www.british-energy.com/)