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Last Updated: Sunday, 1 June, 2003, 10:43 GMT 11:43 UK
British Energy 'to cut plant values'
British Energy
Set to be halved in value?
Struggling nuclear power firm British Energy is set to write down the value of its power stations by at least 2.5bn ($4.1bn) this week, according to Sunday press reports.

The write-down will lead the firm to report a loss of more than 4bn when it unveils results on Tuesday, the papers said.

British Energy was saved from financial collapse by a 650m loan from the government last year.

The company supplies one-fifth of the UK's electricity needs but struggled with falling power prices and rising debt levels.

Rethink

When British Energy released its interim results last December it hinted that the 4.44bn balance sheet book value of its assets might be too high.

"The directors have significant doubt as to whether the assumptions and estimates used to determine the carrying values of the company's UK generation fixed assets and stocks are now the most appropriate," the firm said at the time.

Most Sunday papers report the firm will make a big cut in the value of its stations, although they disagree on the actual amount.

The Sunday Times said the write-down would be 3.8bn, while the Independent on Sunday said it would be nearer 2.5bn.

Shareholder woe

British Energy is also expected to give an update on the progress of its financial restructuring.

The changes are expected to leave the company largely in the hands of its creditors, with existing shareholders left with little or nothing.

British Energy was badly hit by the introduction of more competition into the UK's wholesale electricity market as prices were forced down.

The firm was also at a disadvantage because, unlike other operators, it did not have a retail arm which would have allowed it to make up profits.




SEE ALSO:
UK extends British Energy loan
07 Mar 03  |  Business
British Energy saved from the brink
14 Feb 03  |  Business
Q&A: British Energy's crisis
28 Nov 02  |  Business


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