British Energy plc (BE) is the only privately owned nuclear generator in the UK. It owns and operates 8 nuclear power stations, with a combined capacity of 9,600 megawatts, and 1 coal fired power station generating almost 2,000 megawatts. BE produces around one fifth of the UK's electricity.
Following a sudden deterioration in its financial situation, the private sector nuclear electricity generator, BE approached the Government in early September 2002 seeking immediate financial support and discussions about longer term restructuring. Government provided BE with a short-term credit facility of up to £650m rescue aid, approved by the European Commission, which has been fully repaid.
A solvent restructuring plan was put in place and agreed with creditors. Government played its part by:
The restructuring of BE was completed in early 2005. BE has undertaken to make certain payments into the NLF. These include payments which give the NLF an economic interest in BE. At the direction of the Secretary of State, the NLF may convert this economic interest, in whole or in part, into shares in BE.
In July 2006 Alistair Darling, the then Secretary of State for Trade & Industry, said in a written statement to Parliament:
The Chancellor stated in his Budget 2006 announcement that the Government would be prepared to consider selling part of their stake in British Energy. I confirm that the Government will actively consider a sale of part of their stake in British Energy via a capital markets transaction. The subsequent sale of part of the Government's stake in BE was announced by the then Secretary of State on 1 June 2007. 450 million shares were converted and sold, raising gross proceeds of £2.34bn.
Net proceeds from the sale have gone to the Nuclear Liabilities Fund (NLF) to diversify its assets away from BE and will be used to meet the future decommissioning costs of BE’s eight nuclear power stations.