EC approves controversial British Energy restructuring plans

London (Platts)--22Sep2004

The European Commission has approved British Energy's restructuring plans, the
EC said Wednesday. The approval comes despite strong protests from some BE
shareholders. "The Commission is satisfied that the new structure of British
Energy will ensure that aid is exclusively used for the decommissioning of
nuclear power plants in the future," the EC said. There had been concern that
the level of state aid involved in the restructuring process could breach
European competition laws. But the ruling gives BE the green light to go ahead
with the controversial plan, as long as government funds are used for nuclear
decommissioning. Under the plans shareholders will receive only 2.5% of the
new equity, while the UK Government will take the majority stake of around 65%
and bondholders the rest. Shareholders Polygon, which hold a 5.6% stake had
lobbied the EC to try to get the restructuring changed as power prices have
risen dramatically since the deal was first agreed in October 2003.

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