Final call for cash in the great power pay-off

It's time to pay up for shares in the generators.
Holders of partly paid shares in National Power and PowerGen, all 1.4 million of them, are reminded that the third and final instalment on the shares must be in the hands of the registrars by Thursday, 12 September, in order to meet the payment deadline of 17 September.

The final instalment is 136p a share for National Power and 142p for PowerGen, although shareholders who opted for a discount when they applied for shares in March 1995 will pay 15p a share less. Holders who put their shares into a PEP should pay the PEP provider.

The shares go fully paid on 9 September and shareholders who do not wish to pay the final instalment should sell by 6 September. Otherwise they will still be liable to pay the final instalment before they can dispose of the shares. Investors who fail to pay the final instalment will forfeit their shares, which will be reclaimed by the Treasury. Investors will then receive a cheque for the current value of their shares, less the Treasury's expenses, which will be something under 10p a share.

Investors who hold onto their National Power shares will have an asset which earns them a dividend currently equal to 7 per cent gross on their investment. PowerGen shareholders will earn just over 5 per cent gross, provided in both cases that the dividend is maintained. That cannot, of course, be guaranteed as the shadow of a Labour government which has threatened a windfall tax on utilities looms increasingly large.

A windfall tax could force the companies to cut their dividends. The regulator, Offer, could also decide to get its oar in and win some brownie points from the general public by demanding more price cuts for customers. But investors could also be in line for a special extra dividend in the next nine months if utilities go ahead with plans to rebate their excess cash to shareholders and customers so there is no fat left for Gordon Brown to get his teeth into.

National Power has already paid out 100p in special dividend. PowerGen could certainly follow suit.