Government bail out buys time at British Energy
British Energy narrowly avoided pulling the plug on its power stations yesterday after winning a further £240m from the government.
Link: Administration threat grows at British Energy
The troubled nuclear energy generator secured the extra cash, pushing its total loan from the government to £650m, after successful last minute negotiations allowed BE to continue operating until November.
But the threat of administration still hangs over the company – if it is not able find away of repaying the government loans in two months time it will not having the working capital to continue operating.
‘We have decided to extend the loan for a further two months in order to give sufficient time to clarify the company’s full financial position and to come to a clear view on the options for restructuring the company,’ said Patricia Hewitt, trade and industry secretary.
But Hewitt maintained the government was not handing the company a blank cheque, saying: ‘No decisions have been taken and no commitments given on the company’s long term future at this time.’
The decision was criticised by opposition spokesmen – the Liberal Democrats described the loan as ‘more like a standing order than a blank cheque’, while Tim Yeo, shadow trade and industry secretary, said: ‘Applying larger and larger sticking plasters to an open wound will not stop the bleeding.’
