Troubled energy giant returns to stock market
British Energy shares were back trading today after the nuclear power generator completed a life-saving financial restructuring.
The company, which required a debt-for-equity swap to stay afloat, returned to the London Stock Exchange with a market value of around £1.5bn (€2.1bn).
Shares were given the green light to start trading – at 285p – after the High Court in Edinburgh approved the Government-backed restructuring on Friday.
In a scheme drawn up in October 2003, banks and bondholders wrote off around £1.3bn (€1.85bn) in debt in return for control of the group – leaving shareholders with just 2.5% of newly-created British Energy Group.
Without the debt-for-equity swap, which also required the support of the European Commission, British Energy would have faced insolvency. It was plunged into financial difficulties by a sharp fall in wholesale electricity prices.
Despite the financial overhaul, chief executive Mike Alexander said the company’s job was far from over.
He said on Friday: “The new management team has started to address the past under-investment and unacceptable output. We must put that right but it will not be easy and it will take time.”
The challenges facing British Energy were highlighted last month when first half losses after tax and one-off items came in at £262m (€373.8m), against £79m (€112.7m) last time.
The company added that the rest of 2004/5 would be difficult due to a number of unexpected shutdowns at its plants since mid-March and delays in reopening power stations at Hartlepool and Heysham.
Shares later slipped to 274.5p, although the company is worth far more than the £90m (€128.4m) it was valued at at the time of its delisting in October.
