Gas chief gets top job at British Energy as rescue nears

British Energy yesterday hired a senior Centrica executive as its new chief executive in a clear sign that banks and bondholders in the beleaguered nuclear power company will approve its £3bn financial rescue later this month.

Mike Alexander, the chief operating officer with the British Gas to AA road services group, will join British Energy on 1 March. Although the company would not divulge details of his pay package, Mr Alexander is expected to receive a salary of more than £400,000 plus bonus payments if he succeeds in turning the ailing company around.

His appointment was seen as a strong signal that creditors will agree to the financial restructuring of British Energy by the deadline of 14 February. Bondholders are being asked to accept shares and new bonds worth a quarter of the £1.2bn they are owed. In return the Government is offering to shoulder up to £3bn of the company's nuclear liabilities.

If the deadline is not met then the Government has said it will withdraw its £650m loan to British Energy, forcing the company into administration. "There is a small risk that the rescue deal will not be approved but I don't think Alexander would have taken the job if he thought he was going to end up working for an administrator," said one source close to British Energy.

Shareholders in British Energy meet next Monday to approve the other key element of the rescue package – the £400m sale of its interest in the Canadian nuclear power generator Bruce. Shareholders will be left with a stake of just 5-10 per cent in British Energy when the restructuring is complete.

Mr Alexander joined British Gas, the forerunner of Centrica, in 1991 after a career with the oil company BP and was managing director of British Gas Trading during the liberalisation of the UK energy market in the 1990s. He is 55 and a chemical engineer by training and is credited with the creation of Goldfish, the British Gas credit card.

Centrica said that Mr Alexander's responsibilities would be subsumed by three other senior executives – the deputy chief executive Mark Clare, finance director Phil Bentley and Roger Wood, who is managing director of the AA.

Mr Alexander is understood to have been approached by British Energy's headhunters, Heidrick and Struggles, before the company issued its devastating warning last September that without government aid it could be forced into insolvency. He was on an initial list of more than 30 candidates.