Generators plan hefty dividends

National Power and PowerGen set out to woo shareholders yesterday by unveiling hefty dividends for the current financial year. Marking the pathfinder prospectus for the £4bn goverment sale of shares in the companies, National Power said that the payout would rise by 24 per cent per share to 15.45p while PowerGen will increase its dividend by almost 19 per cent to 15p. The increase was announced as the Government confirmed that private investors must pay a minimum of about £1,000 to participate in the sale, buying a package of at least 200 shares in the companies. The minimum investment is higher than in other recent government offers, suggesting it is targeted at more sophisticated private investors.

The details emerged amidst warnings of regulatory uncertainty and the threat of the companies being referred to the Monopolies and Mergers Commission.

Professor Stephen Littlechild, director general of electricity supply, said a week ago that he might launch an investigation into wholesale electricity prices, which could result in an MMC reference. Professor Littlechild has also demanded that the companies sell power plants to increase competition or risk being referred to the MMC.

PowerGen warns in the prospectus that "there will be significant difficulty" in achieving power station sales that meet its own objectives and those of Professor Littlechild. National Power also highlighted the problems in selling plants. Both companies have argued in the past that they are being asked to sell market share and must get the right price for shareholders.

John Baker, chief executive of National Power, said that in spite of the problems the company would do all it reasonably could to meet the regulator's requirements on power plant sales. Both companies said they did not expect to end up with the MMC, but Mr Baker added:"In the event of an MMC reference, National Power will present a robust case."

The companies also acknowledge that wholesale electricity prices may this year breach the cap set by the regulator but say that this is due to factors outside their control.

Ed Wallis, chief executive of PowerGen, said: "I do not think anybody has got the grounds to send me to the MMC now or on the basis of anything that might unfold in the course of this year."

The pathfinder showed that the first instalment for the UK public will be 170p for each National Power share and 185p for each share in PowerGen. Institutions, which will pay more than individuals, will be told their first instalment on 16 February.

The second instalment for private and institutional investors will also be 170p in National Power and 185p in PowerGen. The third and final instalment will be set by institutions bidding for shares and will be announced on 6 March, immediately before dealings in the partly-paid shares begins.

Private investors who register and buy through an approved share shop will receive extra incentive discounts of 25p per share on the first 800 allocated. The discount will be split to give 10p off the second payment on 6 February 1996 and 15p off the final instalment in September 1996. The discount and alternative incentive of bonus shares are intended to encourage people to hold on to their shares.

The UK public must buy shares in a package of three National Power to two PowerGen, although the partly-paid shares will trade separately. Holders of the partly-paid shares will be eligible for the final dividend this year of 11.1p per National Power share and of 10p per share in PowerGen. Private investors can also buy shares through a retail tender as part of the international offer.

The tender, designed to allow people to buy more shares than they might be allocated in the public offer, carries no incentives, and requires a minimum £8,000 investment.

The Government announced 2.4 million people have pre-registered for shares in the public offer. At least 40 per cent of the total shares in the offer will be reserved for the public.

Outlook, page 25

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee