Shareholders in British Energy are to be left virtually empty-handed after the Government's £4bn rescue of the stricken nuclear generator.
Creditors, British Energy executives and Department of Trade and Industry officials are working through the weekend to meet the Tuesday deadline for an agreement. Patricia Hewitt, the Trade and Industry Secretary, has warned she is "well prepared" to put the company into administration if the timetable slips. Separate sources involved in the negotiations said that under the deal, existing shareholders will have to surrender virtually their entire stake in British Energy. Instead, they will be issued with warrants, which they can cash in if its capitalisation reaches a certain size.
Banks and bondholders will be given new British Energy bonds and will emerge as the company's largest shareholders. This represents a climb- down by executives, who wanted to give shareholders up to 10 per cent of the restructured business.
Broad agreement has been reached between the parties, but securing a deal by Tuesday will be tight. A British Energy spokesman said: "We expect the deadline to be met and the Government is well placed for administration should anything change."
A creditor source said: "Everything is going back and forth between the DTI. Mad Freddie could tell you that it won't be finished on Tuesday."