British Energy could raise £400m with sale of Canadian generator

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The Independent Online

British Energy, the crisis-torn nuclear electricity generator, yesterday disclosed that it is in talks to sell its Canadian nuclear operations to ease its financial plight.

Analysts estimate that the Ontario-based Bruce Power business could fetch up to C$1bn (£402m). British Energy owns 82 per cent of Bruce Power and has an 18-year lease to operate its four reactors.

The potential buyer of the business is a Canadian consortium consisting of British Energy's existing partner in Bruce, Cameco, the Calgary-based pipeline company Trans-Canada and an investment bank called Borealis.

Cameco, the world's largest supplier of uranium, already has a 15 per cent stake in Bruce.

British Energy said that if the sale went ahead, the proceeds would be used to repay the £650m credit facility the Government gave the company in September to prevent it from becoming insolvent.

The loan facility expires in two weeks and unless a long-term restructuring of British Energy has been agreed, then the company could be put into administration.

Industry observers were split on what the implications of the Bruce sale might be. Some sources close to British Energy suggested it meant the company and the Government might be inching closer to an agreement.

One source said: "If British Energy is to survive then everybody has got to take some pain. In order to keep on the straight and narrow, the company is having to sell off some of the family silver."

However, other sources suggested British Energy might be attempting to rush through the sale of Bruce before it is placed in administration. Under the terms of its nuclear operating licence, British Energy would forfeit its interest in Bruce if it went into receivership.

British Energy paid C$650m for its stake in Bruce three years ago. Last financial year it contributed £42m in profits and this year analysts expect it to make £92m.

British Energy has already announced that it is considering selling its stake in another North American business, Amergen, which owns part of the Three Mile Island complex. Amergen is a 50:50 joint venture between British Energy and Elexon of the US.