British Energy questions Goldman Sachs over share purchases

British Energy is believed to have written to Goldman Sachs to identify the beneficial owner behind a 14 per cent stake in the electricity generator currently held by the US investment bank.

A statement to the Stock Exchange yesterday revealed that Goldman held 103 million shares in British Energy. Of that total, the investment bank said it was the beneficial owner of 5.2 million shares and that it held a further 87 million, or 14 per cent of the company, on behalf of its clients. British Energy wants to know who they are.

Goldman has steadily built up this shareholding over the past month. Who ultimately owns it has become particularly important to British Energy in light of last Friday's news that the hedge fund Polygon had taken a 5.6 per cent stake in the company with the aim of blocking its planned debt restructuring.

Under the terms of the government-backed deal, shareholders will get just 2.5 per cent of the company and warrants entitling them to a further 5 per cent. Bondholders and senior creditors will get the remaining 97.5 per cent of the post-restructuring entity.

Analysts offered two possible motives for the stake-building through Goldman. The bank's client could be looking to support Polygon's efforts to block the restructuring, but equally it could be on the side of bondholders, or possibly a bondholder, and to want a significant stake in the company with which it can support the planned restructuring when it is put to a shareholder vote.

It was unclear yesterday whether Goldman held the 14 per cent stake on behalf of one single client or a number. When the shareholding is added to that beneficially owned by the US bank, it takes the total held by Goldman to 16.6 per cent.

At the time of British Energy privatisation in the mid-1990s, the Government ruled that no shareholder should control more than 15 per cent of the firm, given its strategic importance as one of the UK's largest energy-providers. As a result, British Energy will be keen to find out whether those who control 16.6 per cent of the company are acting in concert.