Britain says Urenco stake sale goes ahead

The Government is to proceed with plans to sell some or all of its one-third shareholding in the uranium enrichment company Urenco. The stake is expected to fetch an estimated £3bn – valuing the whole company at £9bn.

The sale of Urenco would represent one of the biggest privatisations in years, and could unleash a wave of further such deals as the Government seeks to cut public debt.

"The decision to proceed towards a sale comes after the Government has secured agreement from its Dutch and Germany partners," a spokesman for the Department for Business said yesterday. Urenco is jointly owned by the British and Dutch governments and German power companies E.ON and RWE.

"We are in talks with the British and German partners, but we don't have any news on that subject yet," a Dutch economics ministry spokesman said.

The ministry, which is being advised on the deal by the investment bank Morgan Stanley, added that the scale and timing of any sale had not yet been determined and depended upon further discussions.

Potential buyers include the Canadian uranium group Cameco, the Canada Pension Plan Investment Board, Japan's Toshiba and Areva, the French nuclear company.

The Government's decision to press ahead with the stake sale is part of a wider drive to cut debts that could result in the sale of as many as half of the 21 companies in which the state has a shareholding over the next eight years.

Urenco enriches uranium into nuclear fuel sold to power stations in Europe, the US and Asia.

The company controls one of the world's most secret technologies but anyone acquiring the firm will not be able to access this because production of centrifuges, or enrichment machines, is lodged in a separate unit, the Enrichment Technology Company (ETC).