BE raises £174m from US nuclear sale

The financial restructuring of the embattled nuclear power company British Energy cleared another hurdle yesterday after it agreed to sell its half stake in the American nuclear generator Amergen for £174m to the American utility Florida Power & Light.

The sale of the 50 per cent holding in Amergen, the operator of the Three Mile Island reactor, was one of the conditions of the £3.3bn rescue of British Energy agreed in principle in February between the Government and the company's creditors.

British Energy's banks and bondholders, who are owned some £1.2bn, have until the end of this month to sign the formal restructuring agreement. Sources close to the negotiations said they were confident the deadline would be met.

Shareholders will be virtually wiped out under the restructuring, which will leave them with less than 5 per cent of the company.

Bondholders will emerge with about two-thirds of the business and British Energy's banks the rest.

The restructuring will not be finally cleared until the European Commission gives its approval to the state subsidies involved in the rescue.

The UK taxpayer is effectively shouldering all of British Energy's nuclear liabilities. EU approval could take until next summer.

The Amergen sale contains a clause under which Exelon, the owner of the other 50 per cent of the company, has the right to buy British Energy's half stake for the same price as Florida Power & Light is offering. If the right was exercised, British Energy would have to pay a $8.295m (£5.2m) break fee to FPL.

Exelon also has the right to sell down its interest in Amergen on a pro-rata basis to British Energy, in which case PFL would still end up owning 50 per cent but Exelon and British Energy would each be left with 25 per cent.

A British Energy source said it was unlikely that Exelon would exercise its right to take 100 per cent control because it had been offered the 50 per cent stake in the past but balked at the price.

The sources also said Exelon was unlikely to exercise its so-called "tag along" right by selling down part of its half stake.