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Last Updated: Friday, 12 September, 2003, 11:21 GMT 12:21 UK
British Energy sells US stake
British Energy
Can British Energy avoid administration?
Cash-strapped nuclear power firm British Energy has raised 174m ($278m) by selling its 50% stake in the US firm AmerGen Energy.

British Energy said it would use the proceeds of the sale to repay part of the 650m government loan it received last year.

The stake is being bought by FPL Energy, a subsidiary of US firm FPL group.

British Energy is still struggling to agree a rescue deal with banks and bondholders before a government-imposed deadline of 30 September.

The sale of the stake in AmerGen was one of the conditions of an outline agreement between British Energy and its creditors, reached in February.

Administration threat

British Energy's financial crisis was triggered by rising debts and a slump in electricity prices following a liberalisation of the wholesale power market last year.

The firm suffered more than most because, unlike other operators, it did not have a retail arm which would have allowed it to make up profits.

At the weekend, reports suggested that the firm could fall into administration if it failed to sort its finances out by 30 September.

Despite reaching an outline agreement with creditors in February, the details are still causing trouble.

Part of the continuing argument revolves around exactly how much of the company will go to the bond-holders, who have more than 80% of British Energy's 480m debt, and what fraction current shareholders would retain.

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