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1 October 2003 - UK nuclear power generator British Energy announced today that it had completed a last-minute restructuring deal with creditors. Failure to reach the agreement would have seen the firm, which supplies one fifth of the UK's power, put into liquidation.
Negotiation over the terms of the life-saving deal carried on late last night, ahead of the government's midnight deadline. Under the agreement, key creditors have agreed to write off what they are owed in exchange for 97.5 per cent of the newly-restructured firm, and about £425m ($706m) in new bonds. Shareholders are expected to end up owning less than one per cent of the firm.
As part of the rescue plan, the UK government is to help meet some of the firm's future liabilities, such as the cost of recycling nuclear waste.
British Energy chief executive Mike Alexander said the agreement would allow the company to focus on improving its performance. "We are determined to see British Energy return to being a prominent and respected participant in the UK energy market," he said.
The deal, which is worth up to £5bn, will require the approval of the European Commission, which enforces European Union restrictions on state aid to industry. The commission is already investigating the legality of the programme of temporary emergency government loans, which have been sustaining British Energy since last year
The company has been fighting for survival since moves to liberalise the wholesale power market pushed electricity prices below production cost last year. The crisis triggered a collapse in British Energy's share price, and left creditors owed some £1.3bn wondering if they would ever be repaid.
The company's woes were underlined in June this year, when it turned in a £4.3bn full-year loss after writing down the value of its eight UK nuclear power plants by £3.6bn.
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