Government made responsible for BE liabilities
Saturday 25 September 2004
British Energy's £3.4bn of nuclear liabilities and all its debts are to be included in the public finances after the decision yesterday by government statisticians to classify the company in the public sector for the purposes of drawing up the national accounts.
A spokesman for the Office for National Statistics said the reclassification reflected the degree of control that ministers would have over the nuclear generator once its financial restructuring was complete.
The taxpayer is inheriting its historic decommissioning liabilities in return for a deal whereby 65 per cent of its future free cash flow will go to the Government. The ONS said its preliminary view was that the inclusion of British Energy in the public sector would not have a significant impact on the Government's fiscal rules, which include a requirement that national debt should not exceed 40 per cent of GDP.
Meanwhile, British Energy spelt out the tactics it intends to use to thwart an attempt by rebel shareholders - led by Polygon Investments and Brandes - to block the refinancing of the company. BE said it intended to circumvent any attempt to block the deal by transferring its assets into an intermediate holding company of the restructured group.
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