mrz
27-11-02, 15:29
EU Approves Government Rescue Plan for British Energy
The Associated Press
Published: Nov 27, 2002
BRUSSELS, Belgium (AP) - European Union regulators Wednesday approved a $1.8 billion government rescue package for nuclear power operator British Energy PLC.
The aid will prevent disruptions to British power supplies and ensure nuclear safety, the European Commission said.
The commission said the British government can lend the company up to 899 million pounds ($1.39 billion) to keep the company afloat while it devises a longer-term solution to its problems.
In addition, the EU authorities said London can provide up to 276 million pounds ($428 million) for unspecified "contingencies."
As part of the initial phase of the bailout, the government will be allowed to give short-term rescue credits for six months. Those credits will be given in staggered amounts and must be approved by a group of independent auditors before their release. Britain must also provide the commission with monthly reports detailing payments.
Another condition is that British Energy can't use the credit line for capital expenditure, such as boosting its power-producing capacity.
Instead, the money, which must be paid back at market interest rates, is to cover the company's operating costs ahead of a full restructuring plan.
British Energy, which produces a fifth of Britain's electricity, has suffered a cash squeeze due to plunging power prices and technical problems at its power stations.
Government loans to companies in EU countries are subject to commission approval because the loans may distort cross-border trade.
British Energy's loan has been particularly controversial. Several companies operating Britain claim it skews the domestic market.
Last Friday, Britain's High Court ruled environmental pressure group Greenpeace and renewable energy provider Ecotricity can take the government to court over the loan.
AES Drax, a unit of U.S. company AES Corp., has threatened to sue the government if it continues to support British Energy.
AP-ES-11-27-02 0935EST
http://ap.tbo.com/ap/breaking/MGAJHL5D19D.html
The Associated Press
Published: Nov 27, 2002
BRUSSELS, Belgium (AP) - European Union regulators Wednesday approved a $1.8 billion government rescue package for nuclear power operator British Energy PLC.
The aid will prevent disruptions to British power supplies and ensure nuclear safety, the European Commission said.
The commission said the British government can lend the company up to 899 million pounds ($1.39 billion) to keep the company afloat while it devises a longer-term solution to its problems.
In addition, the EU authorities said London can provide up to 276 million pounds ($428 million) for unspecified "contingencies."
As part of the initial phase of the bailout, the government will be allowed to give short-term rescue credits for six months. Those credits will be given in staggered amounts and must be approved by a group of independent auditors before their release. Britain must also provide the commission with monthly reports detailing payments.
Another condition is that British Energy can't use the credit line for capital expenditure, such as boosting its power-producing capacity.
Instead, the money, which must be paid back at market interest rates, is to cover the company's operating costs ahead of a full restructuring plan.
British Energy, which produces a fifth of Britain's electricity, has suffered a cash squeeze due to plunging power prices and technical problems at its power stations.
Government loans to companies in EU countries are subject to commission approval because the loans may distort cross-border trade.
British Energy's loan has been particularly controversial. Several companies operating Britain claim it skews the domestic market.
Last Friday, Britain's High Court ruled environmental pressure group Greenpeace and renewable energy provider Ecotricity can take the government to court over the loan.
AES Drax, a unit of U.S. company AES Corp., has threatened to sue the government if it continues to support British Energy.
AP-ES-11-27-02 0935EST
http://ap.tbo.com/ap/breaking/MGAJHL5D19D.html