Polygon out to force British Energy rethink

Polygon Investments, the activist hedge fund manager, said yesterday that it intended to requisition an extraordinary general meeting of British Energy to try to force the company's management to reconsider the financial restructuring that will leave shareholders with just 2.5 per cent of the business.

Polygon Investments, the activist hedge fund manager, said yesterday that it intended to requisition an extraordinary general meeting of British Energy to try to force the company's management to reconsider the financial restructuring that will leave shareholders with just 2.5 per cent of the business.

The purpose of the EGM will be to vote on a number of resolutions which include seeking to ensure that the British Energy board does not delist the company's shares or make any material disposals of the company's assets.

There will also be a resolution seeking an agreement from the board that it will renegotiate the terms of the debt-for-equity swap programme to make it more favourable to shareholders.

However, although Polygon, which owns nearly 6 per cent of the company, announced its intention to call an EGM, it failed to take the required action needed to bring one about, leaving some analysts believing the announcement was merely an attempt to scare British Energy to the negotiating table.

However, the rebel shareholders' attempts to change the restructuring process seemed doomed to failure. British Energy refused to comment on the Polygon announcement. It has already signed a binding agreement with its creditors, agreed last October when the nuclear generator was facing administration.

At the time it looked like shareholders would get nothing from the company's imminent collapse. British Energy is now awaiting European Union approval for its proposal.

However, Polygon argues that rising electricity prices since the agreement was reached with creditors have placed the business on a sounder economic footing and therefore shareholders should retain a bigger slice of the company.

"Polygon also intends to form an ad hoc committee of shareholders to co-ordinate information about the proposed shareholder vote and other relevant matters," it said in a statement. It also wants British Energy to pay its legal and financial fees and expenses.

A spokesman for British Energy refused to comment.