FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
November 30, 2004
BRITISH ENERGY PLC
(Registrant's name)
3 Redwood Crescent
Peel Park
East Kilbride G74 5PR
Scotland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
Exhibit Index
The following document (bearing the exhibit number listed below) is furnished
herewith and is made a part of this Report pursuant to the General Instructions
for Form 6-K:
Exhibit Description
No. 1 RNS Announcement, re: Posting of Documents dated 30 November 2004
NOT FOR DISTRIBUTION INTO AUSTRALIA, CANADA, GERMANY, ITALY, JAPAN AND THE
UNITED STATES
British Energy plc
Posting of Restructuring documents and update
Posting of Restructuring documents
30 November 2004
British Energy plc ("British Energy") announces that it is today posting the
following documents in relation to the proposed restructuring of the British
Energy Group that was announced on 1 October 2003:
- a circular to shareholders in relation to a members' scheme of
arrangement under section 425 of the Companies Act 1985 (the "Members' Scheme")
and a disposal of the business and assets of British Energy to British Energy
Holdings plc (the "Disposal") containing notices convening: (i) Court Meetings
of Ordinary Shareholders and A Shareholders of British Energy, and (ii) an
Extraordinary General Meeting, which are required to approve the Members' Scheme
and the Disposal (as appropriate)(the "Members' Scheme Circular");
- a circular to Scheme Creditors in relation to the scheme of
arrangement under section 425 of the Companies Act 1985 between British Energy
and its Scheme Creditors (the "Creditors' Scheme Circular"); and
- a document comprising: (i) listing particulars in relation to the
issue of New Shares and Warrants of British Energy Group plc pursuant to the
Schemes and other arrangements with Creditors; (ii) a prospectus in relation to
the issue of Warrants of British Energy Group plc pursuant to the Disposal; and
(iii) listing particulars in relation to the issue of New Bonds of British
Energy Holdings Plc (the "Prospectus").
Unless otherwise stated, terms not defined in this announcement have the
meanings given to them in the Members' Scheme Circular and the Creditors' Scheme
Circular.
Indicative timetables of principal events for Shareholders and the Creditors'
Scheme, and further information on the background to and implementation of the
Restructuring as well as information on what Shareholders will receive and the
agreed allocation of New Shares and New Bonds for Creditors are attached to this
announcement.
Shareholders should note that under the proposals, unless they elect to receive
New Shares and/or Warrants, any New Shares and Warrants to which they would be
entitled will be sold in the market and the proceeds remitted to them.
Shareholders with any questions relating to the proposals or the completion and
return of the Form(s) of Proxy or Form(s) of Election should contact the
helpline on freephone 0800-035-0844 (or if calling from outside the UK +44 (0)
1295-225-285 (calls charged at applicable rates)), Monday to Friday 9.00 a.m. to
5.00 p.m. (UK time) or log on to the British Energy Restructuring website,
www.britishenergyuk.info. The helpline cannot provide advice on the merits or
otherwise of the matters described in this announcement, nor give any financial
advice.
Bondholders (and other persons with interests in Bonds) with any questions
relating to the Creditors' Scheme Circular or on what is required of them should
contact the Company's Information Agent, Lucid Issuer Services Limited on: +44
(0) 20 7704 0880; email: sdpatel@lucid-is.com or lpellicci@lucid-is.com. A
website has also been set up to assist Bondholders (and other persons with
interests in Bonds) at www.lucid-is.com/britishenergy from which relevant
documentation is available and which enables Account Holder Letters to be
submitted on-line.
Restructuring update
The indicative timetable for the Restructuring anticipates the Creditors' Scheme
becoming Effective and Admission occurring in mid-January. The indicative
timetable of principal events for the Creditors' Scheme is set out in Appendix 2
and the indicative timetable of principal events for Shareholders is set out in
Appendix 3. However, the indicative timetable is British Energy's best case
expectation and subject to change and delay (see note 1 to the timetable).
On 18 November, British Energy announced that in the light of the delay to the
restart of Hartlepool and Heysham 1, the Company had decided it was prudent to
seek an extension to the present Restructuring Long Stop Date of 31 January
2005.
British Energy now announces that it has agreed an extension of the
Restructuring Long Stop Date under the Creditor Restructuring Agreement until 31
March 2005, subject to certain intermediate milestones, with the ad hoc
committee of Bondholders (on behalf of Consenting Bondholders), Deutsche Bank AG
and BNFL. The extension also requires the agreement of the holders of two-thirds
of the Eggborough Banks' debt and swap claims. The steering committee of the
Eggborough syndicate comprises Barclays and RBS. Eggborough Banks holding some
53 per cent. of the Eggborough Banks' claims (including Barclays and RBS) have
agreed to this extension and RBS extended the RBS Letter of Credit. The
approval of further Eggborough Banks is required to achieve the requisite
two-thirds majority.
In addition, the extension of the Creditor Restructuring Agreement also requires
written resolutions of Bondholders to extend the standstill period under the
terms of the Company's Bonds due 2003, 2006 and 2016 to be signed by a simple
majority of the holders of each series of the Bonds. The ad hoc committee of
Bondholders has agreed to approve these resolutions.
The Secretary of State is not party to the Creditor Restructuring Agreement but,
for technical reasons, her consent is required to enable that agreement to be
extended in the manner contemplated; the Secretary of State has consented to the
extension solely for that purpose. The Secretary of State has also agreed to
extend the long stop date for completion of the Government Restructuring
Agreement between the Company and the Secretary of State to 30 April 2005. In
the context of meeting its overarching objectives at this time of nuclear
safety, security of electricity supplies and value for money for the taxpayer,
the Government has stated that it believes that continuity and stability in the
management of British Energy's business in the immediate future is desirable.
It has also sought and received assurances from British Energy's management that
any measures taken to manage the Group's working capital will not adversely
affect safety or security of supply. The extension of the Government
Restructuring Agreement is therefore subject to conditions relating to those two
issues.
The proposed extension will also preserve the possibility of extension of the
Creditor Restructuring Agreement beyond 31 March 2005 up to 31 October 2005,
again subject to certain intermediate milestones. The requisite parties may
object to the continuation of the extension or may not give such confirmations
or agree the terms (if any) upon which they would be willing for the
Restructuring to be completed after 31 March 2005. Furthermore the agreement of
the Secretary of State will be required to extend the Government Restructuring
Agreement beyond 30 April 2005.
The intermediate milestones to the proposed extension include Bondholders and
RBS passing resolutions approving the Creditors' Scheme by 15 April 2005 and the
Creditors' Scheme becoming effective within 30 business days of grant of the
Creditors' Scheme order or within 15 business days of final determination of any
appeal. These milestones may be extended with the agreement of those parties
and majorities who are required to agree the proposed extension.
If such an extension becomes effective and/or if it becomes apparent that the
Restructuring Effective Date will be delayed beyond 31 January 2005, we will
inform Shareholders by making an appropriate announcement to a Regulatory
Information Service and the press. For the avoidance of doubt, in such
circumstances Admission may not occur prior to 31 January 2005 and will remain
conditional on the Restructuring being implemented. However, there is no
assurance that the proposed extension of the long stop dates for the
Restructuring will be agreed. If for any reason we are unable to implement the
Restructuring prior to the present or any extended long stop dates and a
replacement standstill cannot be agreed with Creditors shortly thereafter, we
would be unable to meet our financial obligations as they fall due, in which
case we may have to take appropriate insolvency proceedings. If we were to
commence insolvency proceedings, distributions, if any, to unsecured creditors
may represent only a small fraction of their unsecured liabilities and it is
highly unlikely there would be any return to Shareholders.
This announcement does not, and is not intended to, constitute or contain an
offer or invitation to any person to purchase securities of the British Energy
Group.
The New Shares, the New Bonds and the Warrants to be issued pursuant to the
Restructuring have not been and will not be registered under the US Securities
Act of 1933, as amended (the Securities Act) or any state securities laws and
are being issued in connection with the Restructuring pursuant to exemptions
from the registration requirements under the Securities Act, including, with
respect to the New Shares and Warrants issued in connection with the Members'
Scheme and the New Shares issued in connection with the Creditors' Scheme, the
exemption provided by Section 3(a)(10) of the Securities Act, and with respect
to the New Bonds and the Warrants (if issued in connection with the Disposal)
only (a) in the United States pursuant to the exemption provided by section 4(2)
of the Securities Act, and (b) outside the US in reliance on Regulation S under
the Securities Act. There will be no public offering of securities in the United
States.
Citigroup Global Markets Limited is advising British Energy Group plc and
British Energy Holdings plc and no one else in connection with Admission and the
Restructuring described in this announcement and will not be responsible to
anyone other than British Energy Group plc and British Energy Holdings plc for
providing protections afforded to their clients nor for providing any advice in
relation to Admission or the Restructuring.
HSBC Bank plc is advising British Energy Group plc and British Energy Holdings
plc and no one else in connection with Admission and the Restructuring described
in this announcement and will not be responsible to anyone other than British
Energy Group plc and British Energy Holdings plc for providing protections
afforded to their clients nor for providing any advice in relation to Admission
or the Restructuring.
Copies of the Prospectus and Members' Scheme Circular have been submitted to the
UK Listing Authority and will shortly be available for inspection at the UK
Listing Authority's Document Viewing Facility, which is situated at:
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
Tel: 020 7066 1000
(Documents will normally be available for inspection within six normal business
hours of this notice being given).
For further information please contact:
Andrew Dowler 020 7831 3113 (Media Enquiries)
John Searles 01355 262202 (Investor Relations)
investor.relations@british-energy.com
NOT FOR DISTRIBUTION INTO AUSTRALIA, CANADA, GERMANY, ITALY, JAPAN AND THE
UNITED STATES
FURTHER INFORMATION ON THE RESTRUCTURING
INTRODUCTION
On 1 October 2003, we announced that we had entered into two conditional
agreements with certain of our key creditors and the Secretary of State setting
out the terms of the Restructuring of the British Energy Group. These agreements
are the Creditor Restructuring Agreement and the Government Restructuring
Agreement.
The Restructuring involves the Bondholders, the Eggborough Banks, RBS and the
Significant Creditors compromising their claims against the British Energy Group
in exchange for, amongst other things, the issue to those creditors of New Bonds
of Holdings plc and New Shares of New British Energy. The Restructuring
contemplates that the Bondholders and RBS will compromise their claims through a
Court-approved scheme of arrangement under section 425 of the Act. The
Significant Creditors will extinguish all, and the Eggborough Banks will
extinguish part, of their existing claims against the British Energy Group
pursuant to the various arrangements under the Creditor Restructuring Agreement
and related documents.
In order to implement the Restructuring, it is proposed that we become a
wholly-owned subsidiary of New British Energy by means of the Members' Scheme
which will require the approval of our Ordinary and A Shareholders, and sanction
by the Court. If the Members' Scheme is not approved, then we are required to
implement the Restructuring by disposing of all of our Business to Holdings plc
(a subsidiary of New British Energy) in exchange for Holdings plc agreeing to
assume all of our liabilities. In view of its size, the Disposal would, if we
were listed at the time of such Disposal, constitute a "Class 1" transaction for
the purposes of the Listing Rules requiring the approval of our Ordinary
Shareholders. Even though we are no longer listed we are seeking this approval
at the Extraordinary General Meeting.
On 12 October 2004, we announced that the Initial Conditions had been satisfied,
including the receipt by the Secretary of State of State Aid Approval. However,
even though the Initial Conditions have been satisfied the Restructuring does
remain subject to a number of significant uncertainties and the satisfaction of
a number of other important conditions.
References to "we", "us", "our" or "the Company" are to British Energy.
SUMMARY OF THE RESTRUCTURING
Creditors
The key features of the Restructuring are as follows:
- Creditors (other than BNFL) have agreed to extinguish their unsecured
claims against the Group in exchange for GBP275 million of New Bonds to be
issued by Holdings plc and at least 97.5 per cent. of the New Shares to be
issued by New British Energy. Appendix 1 to this announcement contains details
of the agreed allocations of the New Bonds and New Shares to these Creditors
which have been extracted without material adjustment from the Creditors'
Scheme Circular;
- NLF will fund the New British Energy Group's qualifying uncontracted
nuclear liabilities and qualifying costs of decommissioning the Group's nuclear
power stations. The Secretary of State will fund qualifying decommissioning
costs and qualifying uncontracted liabilities to the extent they exceed the
assets of the NLF, as well as, subject to certain limitations, qualifying
contracted liabilities for historic spent fuel;
- in consideration for the assumption of the nuclear liabilities and
decommissioning costs referred to above, Holdings plc will issue GBP275 million
of New Bonds to the NLF and will also make further annual periodic payments to
the NLF, including the NLF Cash Sweep Payment;
- the Eggborough Banks as lenders and swap providers with security over the
Eggborough Station and the shares of EPL, have agreed to replace their existing
secured claims with the right to receive payments under the Amended Credit
Agreement equivalent to those payable to holders of GBP150 million of New Bonds
(including interest and capital). In addition, they will have an option to
acquire the shares in, or assets of, EPL on 31 March 2010 or, prior to 31 August
2009, on or after the occurrence of an event of default that is continuing under
the Amended Credit Agreement. The Eggborough Banks will also be repaid GBP37.5
million pursuant to the RBS Letter of Credit; and
- the BNFL contracts for front-end and back-end related fuel services to the
Group's AGR stations have been amended, amongst other things, in order to link
certain elements of payments under those contracts to wholesale electricity
prices.
Shareholder allocation
In addition, if the Restructuring is completed, New British Energy will issue a
mix of New Shares and Warrants to Shareholders on the following basis:
- if the Members' Scheme is approved by Shareholders and it becomes
Effective, Shareholders will receive New Shares representing 2.5 per cent. of
the issued share capital of New British Energy immediately following
implementation of the Restructuring and Warrants entitling them to subscribe for
New Shares equal to 5 per cent. of New British Energy's thereby diluted share
capital immediately following completion of the Restructuring (excluding the
impact of the Employee Options and conversion of the NLF Cash Sweep Payment);
- if the Members' Scheme is not approved by Shareholders (or it otherwise
Lapses) but Ordinary Shareholders approve the Disposal, then Shareholders will
not receive any New Shares but will receive Warrants entitling them to subscribe
for New Shares equal to 5 per cent. of New British Energy's thereby diluted
share capital immediately following completion of the Restructuring (excluding
the impact of the Employee Options and conversion of the NLF Cash Sweep
Payment); and
- if Shareholders do not vote in favour of the Members' Scheme (or it
otherwise Lapses) and Ordinary Shareholder approval in respect of the Disposal
is not obtained, Shareholders will receive no New Shares or Warrants.
A summary of the allocations of New Shares and New Warrants is attached at
Appendix 1 of this announcement. A more detailed description of the
Restructuring is contained in Part VI of the Prospectus: "Further information
relating to the Restructuring".
IMPLEMENTATION OF THE RESTRUCTURING
The Restructuring entails, amongst other things, a debt for equity and debt swap
involving the creation of two new holding companies, New British Energy and its
subsidiary, Holdings plc. British Energy, New British Energy and Holdings plc
will have the same directors. New British Energy will issue New Shares and
Warrants, and Holdings plc will issue New Bonds.
Creditors' claims
The Bondholders and RBS will compromise their claims through Creditors' Scheme.
To become Effective, the Creditors' Scheme must be approved by a majority in
number of the relevant creditors representing three-fourths in value of such
creditors' claims (in each case of those creditors present and voting). The
Creditors' Scheme must then receive the sanction of the Court and the Court
order sanctioning the Creditors' Scheme must be filed with the Scottish
Registrar.
The Significant Creditors will extinguish all, and the Eggborough Banks will
extinguish part, of their existing claims against the British Energy Group
pursuant to the various arrangements under the Creditor Restructuring Agreement
and related documents.
Members' Scheme
In order to implement the Restructuring, it is proposed that we will become a
wholly-owned subsidiary of New British Energy by means of the Members' Scheme.
The Members' Scheme requires the approval of the Ordinary Shareholders and A
Shareholders and must thereafter be sanctioned by the Court.
Disposal
If the Members' Scheme is not approved, then we intend to implement the
Restructuring by means of the Disposal. The Disposal involves the sale of our
Business to Holdings plc in accordance with the terms of the Business Transfer
Agreement. In return, Holdings plc will perform all of our obligations and will
discharge all of our liabilities.
The Restructuring is not conditional on Shareholder approval. Therefore, if the
Members' Scheme or the Disposal is not approved, we are required, under the
Creditor Restructuring Agreement, to proceed with the Disposal without the
approval of Ordinary Shareholders. In this case, however, Shareholders will not
receive any New Shares or Warrants.
Differences between Members' Scheme and Disposal
Implementation of the Restructuring through the Members' Scheme may provide
certain tax benefits to the Group, avoids the need to transfer our Business to
Holdings plc and avoids the need to maintain the Company as a shell company
after the Disposal and pending dissolution. For this reason, if Shareholders
approve the Members' Scheme and it becomes Effective they will receive both New
Shares and Warrants as described above. If the Members' Scheme is not approved
by Shareholders and we have to implement the Restructuring through the Disposal,
the risk of disruption which may result from the need to transfer all of our
Business to Holdings plc, the loss of potential tax benefits and the costs
involved in administering the Company after the Disposal has been effected make
this option less attractive. Accordingly, if Shareholders do not approve the
Members' Scheme but pass the Disposal Resolution at the Extraordinary General
Meeting and the Restructuring is completed, they will receive only the Warrants.
If we proceed with the Disposal, Shareholders will remain holders of British
Energy Shares but we will cease to beneficially own any assets (including shares
in subsidiary companies) as these will have been transferred to Holdings plc.
The British Energy Shares will, therefore, be unlisted shares in an empty shell
company with no value. In due course British Energy would be wound up or struck
off the register of companies on a solvent basis and there will be no further
return to Shareholders.
WHAT SHAREHOLDERS WILL RECEIVE
Members' Scheme
If the Members' Scheme is approved by the requisite majorities of Shareholders
and becomes Effective, subject to certain restrictions relating to overseas
Shareholders, Shareholders will be entitled to receive:
for every 50 Ordinary Shares 1.0 New Share and
2.1 Warrants
for every 50 A Shares 1.0 New Share and
2.1 Warrants
in respect of British Energy Shares held at the Scheme Record Time.
Each Shareholder will receive New Shares and Warrants under the Members' Scheme
only if he or she elects to do so by completing the relevant Form(s) of Election
or, in the case of the Warrants only, such Shareholder is deemed to have elected
to receive such Warrants. If a Shareholder does not make a valid Shareholder
Election or Deemed Election, the relevant New Shares and Warrants will be sold
in the market at the best price reasonably obtainable in the market and the net
proceeds (if any) will be remitted to the relevant Shareholder. In considering
whether to make a Shareholder Election, Shareholders should bear in mind the
expense involved in transactions in small numbers of securities. It is generally
the case that stockbrokers' minimum commissions are around GBP10 to GBP25.
Disposal with Ordinary Shareholder approval
If the Members' Scheme is not approved by the requisite majorities of
Shareholders, is not sanctioned by the Court or otherwise Lapses, but the
Disposal Resolution is approved at the EGM then following completion of the
Restructuring, Shareholders will, subject to certain restrictions relating to
overseas Shareholders, be entitled to receive:
for every 50 Ordinary Shares 2.1 Warrants
for every 50 A Shares 2.1 Warrants
in respect of British Energy Shares held at the Disposal Record Time.
Each Shareholder will receive Warrants under the Disposal only if he or she
elects to do so by completing the relevant Form(s) of Election or such
Shareholder is deemed to have elected to receive such Warrants. In the event
that a Shareholder does not make a valid Shareholder Election or Deemed
Election, the relevant Warrants will be sold in the market at the best price
reasonably obtainable in the market and the net proceeds (if any) will be
remitted to the relevant Shareholder. In considering whether to make a
Shareholder Election, Shareholders should bear in mind the expense involved in
transactions in small numbers of securities. It is generally the case that
stockbrokers' minimum commissions are around GBP10 to GBP25.
The terms and conditions of the Warrants are set out in Part VIII of the
Prospectus: "Conditions of the Warrants".
Disposal without Ordinary Shareholder approval
If the Members' Scheme is not approved by the requisite majorities of
Shareholders, is not sanctioned by the Court or otherwise Lapses and the
Disposal is not approved at the EGM, then Shareholders will not receive any New
Shares or Warrants.
There are a number of risks related to ownership of the New Shares and Warrants.
Part II of the Prospectus: "Risk factors" contains further detail in relation to
such risks.
FINANCIAL EFFECTS OF THE DISPOSAL
Under the terms of the Disposal, Holdings plc will acquire all of our Business
in exchange for agreeing to assume all of our liabilities. As at 30 August 2004,
Holdings plc had net assets of GBP50,000. Holdings plc did not trade prior to
that date and therefore has no previous earnings. As at 30 June 2004, we had
total assets of GBP2,559 million and total liabilities of GBP5,840 million. In
the 3 month period ended 30 June 2004, we had a loss after tax and exceptional
items of GBP115 million. Following the Disposal we would have no assets and our
liabilities will be covered by the indemnity from Holdings plc.
Shareholders should not rely on this summary information and should read the
Members' Scheme Circular and the accompanying Prospectus. The net asset
information for Holdings plc has been extracted without adjustment from the
Accountants' Report set out in Section 4 of Part IV of the Prospectus: "
Financial information", and the figures relating to our total assets, total
liabilities, and loss after tax and exceptional items have been extracted
without material adjustment from our results for the three months ended 30 June
2004 which are set out in Section 2 of Part IV of the Prospectus: "Financial
information".
CURRENT TRADING AND PROSPECTS
Trading at the time of the announcement of the Restructuring
At the time of the announcement of the outline terms of our Restructuring on 28
November 2002, the wholesale market price for electricity had been GBP17.0 per
MWh for delivery in 2003/04 whilst average unit operating costs (including those
relating to the Eggborough Station) for the six months ending 30 September 2002
were approximately GBP19.9 per MWh. In short, as a result of our high fixed cost
base (particularly the costs associated with our fuel) on a per MWh basis, our
costs of producing electricity were exceeding our achieved selling price. We
entered into the agreements with Creditors and the Secretary of State in October
2003 in order to avoid administration in circumstances where no other viable
option was available to the Group. The agreements provide the best that we could
negotiate for Shareholders at the time. We believe the only alternative would
have been for us to take appropriate insolvency proceedings under which any
distribution to Shareholders would have been highly unlikely.
At the time of the announcement of the formal terms of the Restructuring on 1
October 2003 we had contracted to sell our electricity for the remainder of that
financial year at what we also estimated at that time would be an average price
of GBP17.1 per MWh. At that time, we had entered into fixed price contracts for
summer 2004 and winter 2004/2005 in relation to approximately 50 per cent. of
our output for 2004/05 at an average price of GBP18.3 per MWh and altogether had
contracts to sell approximately 90 per cent. of our output for that period.
Taken together with the partial hedge provided by the new BNFL contracts
(assuming the market price could fall below GBP21.0 per MWh), this meant we
would only be 8 per cent. exposed to fluctuations in the wholesale electricity
price. The prevailing market price at the time had been GBP21.6 per MWh for
2004/05.
The wholesale market price for electricity has increased significantly compared
to the price at the time that the Restructuring was announced. This increase in
the wholesale price for electricity, together with key elements of the
Restructuring, details of which are set out in summary in the bullet points on
the second half of page 9 and on page 10 of the Prospectus (and which are dealt
with more fully in Part VI of the Prospectus: "Further information relating to
the Restructuring") mean that the outlook for the Group has improved since the
announcement made on 28 November 2002, although this has been offset by declines
in output.
Current, financial and trading prospects of the Group
Nuclear output was 15 TWh (a 67 per cent. load factor) for the three-month
period ended 30 June 2004, 28.7 TWh (a 68 per cent. load factor) for the
six-month period ended 30 September 2004 and 33.1 TWh (a 67 per cent. load
factor) for the seven-month period ended 31 October 2004. The UK nuclear output
for the equivalent periods in 2003 was 17.0 TWh (an 82 per cent. load factor),
33.3 TWh (a 79 per cent. load factor) and 37.9 TWh (a 77 per cent. load factor).
The reduction on the previous year, and in the second quarter of this year
compared to the first quarter, has been primarily due to unplanned outages.
During the three-month period ended 30 June 2004 and the six-month period ended
30 September 2004, investment expenditure on plant projects, major repairs and
strategic spares across the whole Group, including incremental costs associated
with PIP, totalled GBP32m and GBP64m respectively of which we estimate that
GBP17m and GBP32m respectively may have been capitalised, with the main projects
in the period including replacement of cast iron pipework, fuel route
improvements and the implementation of the work management programme. As a
result of the FRS 11 impairment review in the financial year ended 31 March
2003, all expenditure of a capital nature has been expensed and will continue to
be expensed until such time as it is possible to demonstrate that it results in
an enhancement to the carrying value of fixed assets.
As indicated above, we had already contracted to sell much of our planned
nuclear output for the current year during the previous financial year and have
had to buy back power. Therefore we have not seen the full benefit of the recent
rises in electricity prices. These factors, as well as increased pension costs
and an increased depreciation charge related to the impairment reversal made in
March 2004, have had a significant adverse impact on our profitability and cash
flow. In view of the recent unplanned outages and the delayed return to service
of our Hartlepool and Heysham 1 power stations, the Directors consider that the
outlook for the Company's financial and trading prospects for the remainder of
the financial year will be challenging.
The principal factors affecting the financial and trading prospects of the Group
for the current financial year are: output, nuclear unit cash costs, sales, PIP
(see below), and cash and liquidity.
Following the unplanned outage at Heysham 1 in early 2004, as a result of cast
iron pipework failure, we reviewed the implications for further cast iron
pipework replacement at our other nuclear power stations and, accordingly, on 19
March 2004 we announced that our indicative target for nuclear output for 2004/
2005 was reduced from 67 TWh to 64.5 TWh. We have suffered a number of unplanned
outages since that date and following the evaluation of structural inspections
carried out during a statutory outage at Hartlepool, we decided that further
work was required to demonstrate the integrity of certain boilers. On 30 July
2004, we announced that we had revised our target nuclear output for 2004/2005
to around 61.5 TWh. However, following discussions with the NII concerning our
programme of works at Hartlepool and Heysham 1, we currently expect that
Hartlepool and Heysham 1 will not return to service until later this calendar
year and consequently we expect nuclear output of 59.5 TWh in the financial year
ending 31 March 2005 (as we announced on 18 November 2004). Based on New British
Energy's business plans, we further expect the average annual nuclear output
over the next 3 financial years (including this financial year) to be
approximately 61.8 TWh.
Subject always to its continuing obligations as a listed company, New British
Energy proposes to publish information regarding the Group's output on a
quarterly basis at the same time as it publish the results for that quarter
(rather than on a monthly basis) and it does not propose to make further
forward-looking statements regarding the Group's proposed annual output during a
financial year.
Based on an average annual nuclear output over the next 3 financial years of
approximately 61.8 TWh, our average nuclear unit cash costs are projected to be
GBP19.1 per MWh at current price levels. These costs have increased since the
October 2003 announcement as a result of the reduction in output, the higher
level of projected investment and the costs of PIP referred to below, the
increase in electricity prices and inflation. The rise in electricity prices
impacts our nuclear unit cash costs because under the new arrangements for
back-end fuel services we are now making additional payments to BNFL. This will
continue for so long as electricity prices remain above GBP16.0 per MWh (in
2002/ 2003 monetary values and indexed to RPI).
As of 22 November 2004 contracts were in place covering virtually all of the
planned output for the financial year ending 31 March 2005, of which nearly all
are at fixed prices. The average price for these fixed price contracts is
GBP21.0 per MWh. For 2005/2006, contracts are in place for approximately
two-thirds of planned generation, with approximately half of these being at
fixed prices at an average price of approximately GBP25 per MWh. The market
price for forward baseload contracts has continued to rise and the wholesale
price for annual contracts with delivery in 2005/2006 has risen from around
GBP24.5 per MWh at the end of March 2004 to over GBP30.0 per MWh by 22 November
2004, an increase of some 20 per cent. Whilst there is no guarantee that these
prices will continue to prevail they are comfortably above our estimates of
average nuclear unit cash costs.
In August 2003 we brought together a team within British Energy and engaged a
consortium of experienced external consultants, to design and implement a
far-reaching performance improvement programme (PIP). By putting in place and
implementing this programme, which in essence involves investing in our people,
processes and plant, we are aiming to increase the degree of reliability of our
nuclear generating assets. However, because of the programme's wide ranging
nature and the time and costs involved in implementing it, we do not expect to
see the benefits of the hoped for improvement in operational reliability in the
current or next financial year.
AGR power stations are unique to the UK and were built in the 1970s and 1980s by
different design consortia to different design specifications. Accordingly,
there can be no assurance that the improvement in reliability achieved in other
nuclear power station improvement programmes, upon which PIP is based and which
have been undertaken on newer fleets of nuclear power stations based on non-AGR
technology, will be capable of being achieved in respect of our AGR power
stations.
Based on our current expectations of future electricity prices and output, and
therefore our financial resources, we believe that the annual investment in
plant projects, major repairs and strategic spares across the whole New British
Energy Group, which includes incremental annual PIP expenditure of GBP70m to
GBP120m, will be in the range of GBP200m to GBP250m in each of the two years
ending 31 March 2006 and 2007. This compares with the range of capital
expenditure of GBP85m to GBP90m announced in October 2003 which did not include
any PIP expenditure, nor the costs of major repairs and strategic spares. This
financial year, based on the financial resources we expect to have available to
us, this investment will be in the range of GBP140m to GBP170m including
incremental PIP expenditure of approximately GBP20m. If our financial resources
are otherwise required due to unforeseen outages or changes to electricity
prices and collateral requirements, we may be required to adjust our investment
plans accordingly.
On 30 June 2004, net debt was GBP382m with gross debt standing at GBP883m. We
had cash and liquid resources of GBP501m of which GBP321m was deposited as
collateral in support of our trading activities. At 31 October 2004, the amounts
were GBP450m and GBP332m respectively. We also entered into a receivables
facility agreement on 25 August 2004 to provide additional liquidity and we have
agreed to defer amounts due to certain suppliers in order to better match the
profile of monthly expenditure with the receipt of income from the sale of
electricity.
A more detailed description of the Group's current trading and prospects is set
out in Part III of the Prospectus: "Operating and financial review and prospects
". Financial information relating to the Group and a pro forma net asset
statement for the New British Energy Group are set out in Part IV of the
Prospectus: "Financial information" and Part V: "Unaudited pro forma financial
information" respectively. Shareholders should not rely on this summary
information and should read the entire Members' Scheme Circular and accompanying
Prospectus. Our cash and sales figures have been extracted without material
adjustment from our underlying accounting and sales records used in the
preparation of the financial information in Part IV of the Prospectus: "
Financial information" and the information relating to PIP has been extracted
from our own internal records regarding how we allocate our expenditure.
DIVIDEND POLICY
The board of New British Energy intends to distribute to shareholders as much of
New British Energy's available cash flow as prudently possible, but not until
operational requirements of the business permit. In addition, under the terms of
the Restructuring, there are certain restrictions on, or factors affecting, the
board's ability to pay dividends including:
- New British Energy is required to fund cash reserves out of its net cash flow
in order to support the New British Energy Group's collateral and liquidity
requirements post-Restructuring. The initial target amount for the cash reserves
is GBP490 million plus the amount by which cash employed as collateral exceeds
GBP200 million. Prior to paying any dividends, New British Energy's cash needs
to equal or exceed the Target Amount and certain other amounts specified in the
Contribution Agreement;
- the terms of the Contribution Agreement also require that once the cash
reserve is funded to the Target Amount, New British Energy must make the NLF
Cash Sweep Payment. Initially this is 65 per cent. of the New British Energy
Group's adjusted net cash flow (calculated on the basis set out in the summary
of the Contribution Agreement in paragraph 17.2(e) of Part X of the Prospectus:
"Additional information"). This percentage may be adjusted for certain corporate
actions but may never exceed 65 per cent. The requirement to make the NLF Cash
Sweep Payment will greatly reduce the amount of cash that would otherwise be
available for distribution to Shareholders. In addition, New British Energy may
not pay any dividends without making an additional payment to the NLF if the
result of paying such dividend would be that the aggregate amount of dividends
paid to shareholders in the period following the Restructuring would exceed the
aggregate of New British Energy's annual adjusted net cash flow in such period
less the aggregate NLF Cash Sweep Payments payable in such period;
- the terms of the New Bonds contain certain covenants (which are described
in detail in Part VII of the Prospectus: "Terms and conditions of the New Bonds
"), including a restriction that allows New British Energy to pay a dividend
only if the Target Amount is met and no event of default has occurred; and
- New British Energy must have distributable reserves.
As a result of these restrictions and after making a prudent allowance for
collateral requirements the directors of New British Energy consider that the
earliest period for which a dividend may be declared is the financial year
ending 2007. A further description of New British Energy's dividend policy is
set out in Part III of the Prospectus: "Operating and financial review and
prospects".
CONDITIONS AND TERMINATION
Completion of the Restructuring is subject to a number of important conditions,
including the Initial Conditions (which, as mentioned above, have been
satisfied), the Filing Conditions and the Restructuring Condition. Admission is
also conditional upon the Restructuring being implemented. In addition to these
conditions, the Restructuring will not be implemented if either of the Creditor
Restructuring Agreement or the Government Restructuring Agreement is terminated
in accordance with its terms. Both the Creditor Restructuring Agreement and the
Government Restructuring Agreement will terminate if, amongst other things,
British Energy receives a valid notice from the relevant parties terminating the
agreement on the basis that there is a continuing Material Adverse Change. In
such circumstances the standstill arrangements, which restrict the Creditors
from taking any steps to initiate insolvency proceedings or demand or accelerate
any amounts due and payable to them by any member of the British Energy Group,
would also terminate.
Moreover, unless otherwise agreed by the Creditors, the Secretary of State and
British Energy, the Creditor Restructuring Agreement and the Government
Restructuring Agreement will automatically terminate, and consequently the
Restructuring will not be implemented if the Creditors' Scheme has not become
Effective by 31 January 2005 (or such later date as the requisite parties may
agree).
POLYGON AND BRANDES
On 3 September 2004, two groups of shareholders together holding 10.22 per cent.
of our Ordinary Shares, requisitioned an extraordinary general meeting of the
Company. The resolutions proposed by Polygon and Brandes sought to stop us from
taking certain actions which may be necessary to implement the Restructuring. In
response, certain of our Bondholders commenced proceedings in London against
Polygon and Brandes for, amongst other things, the tort of procuring or inducing
a breach of the Creditor Restructuring Agreement or otherwise interfering with
its due performance. We too commenced proceedings against Polygon and its
associates in New York in relation to an SEC filing required to be made by
Polygon in relation to its interests in British Energy.
On 23 September 2004, we sent Shareholders a circular notifying Shareholders of
our intention to apply for the UKLA to cancel the listings of the British Energy
Shares and on the following day we sent a further circular to Shareholders
containing the notice of the Requisitioned EGM. Having considered our recent
circulars, on 30 September 2004 Polygon stated that it now believed that there
was no commercial logic for it supporting the resolutions to be considered at
the Requisitioned EGM and consequently confirmed that it would vote against the
resolutions to be put to the Requisitioned EGM and that it would not further
oppose the Restructuring. On that day, we announced that we would be withdrawing
our action against Polygon in New York and that the Bondholders had agreed terms
to stop the proceedings in London insofar as they related to Polygon.
Brandes subsequently announced on 6 October 2004 that it was not going to pursue
the matter further for the time being but that it would continue to monitor
events so that it may take appropriate steps to promote the legitimate interests
of its clients.
Following our application for the UKLA to cancel the listings of the British
Energy Shares from the Official List, the UKLA cancelled those listings with
effect from 8.00 a.m. on 21 October 2004 and 20 October 2004 was the last day of
dealings in British Energy Shares on the main market of the London Stock
Exchange. Although we are, therefore, exempt from the continuing obligation
provisions of the Listing Rules which apply to issuers of equity securities, we
are intending to comply with these obligations (other than the requirement to
seek shareholder approval for significant transactions such as the Disposal) as
if the listings had not been cancelled. As the listings of the Bonds have not
been cancelled, we do remain subject to the continuing obligation provisions of
the Listing Rules which apply to issuers of specialist debt securities.
The Requisitioned EGM was held on 22 October 2004 following which we announced
that none of the resolutions that had been proposed at the Requisitioned EGM had
been passed.
TIMETABLE AND EXTENSION OF LONG STOP DATES
Our indicative timetable for the Restructuring anticipates the Creditors' Scheme
becoming Effective and Admission occurring in mid-January. The indicative
timetable of principal events for the Creditors' Scheme is set out in Appendix 2
and the indicative timetable of principal events for Shareholders is set out in
Appendix 3. However, the indicative timetable is our best case expectation and
subject to change and delay (see note 1 to the timetable). We have, therefore,
decided that it is prudent to seek an extension to the present long stop dates
of 31 January 2005 and have proposed terms for an extension to at least 31 March
2005 to Creditors and the Secretary of State.
The Group owes some GBP1.5 billion to the Bondholders, the Eggborough Banks,
RBS, the Significant Creditors (currently Deutsche Bank AG) and BNFL which is
stood still pending implementation of the Restructuring but which would become
due and payable if the Restructuring is not completed by the long stop date of
(at present) 31 January 2005. An alternative restructuring would require the
agreement of these creditors and the Secretary of State and we have no assurance
that such agreement would be reached. Furthermore the Board believes that any
fundraising for the purpose of achieving an alternative restructuring would
carry significant risks. If for any reason the Restructuring cannot be completed
before the present or any extended long stop date and a replacement standstill
cannot be agreed with creditors shortly thereafter, we would be unable to meet
our financial obligations as they fall due, in which case we may have to
commence insolvency proceedings. In the circumstances, the Board continues to
believe that there is no reliable alternative to the Restructuring available to
us.
We have agreed an extension of the Restructuring Long Stop Date under the
Creditor Restructuring Agreement until 31 March 2005, subject to certain
intermediate milestones, with the ad hoc committee of Bondholders (on behalf of
Consenting Bondholders), Deutsche Bank AG and BNFL. The extension also requires
the agreement of the holders of two-thirds of the Eggborough Banks' debt and
swap claims. The steering committee of the Eggborough syndicate comprises
Barclays and RBS. Eggborough Banks holding some 53 per cent. of the Eggborough
Banks' claims (including Barclays and RBS) have agreed to this extension and RBS
extended the RBS Letter of Credit. The approval of further Eggborough Banks is
required to achieve the requisite two-thirds majority.
The extension of the Creditor Restructuring Agreement also requires written
resolutions of Bondholders to extend the standstill period under the terms of
the Company's Bonds due 2003, 2006 and 2016 to be signed by a simple majority of
the holders of each series of the bonds. The ad hoc committee of Bondholders
has agreed to approve these resolutions.
The Secretary of State is not party to the Creditor Restructuring Agreement but,
for technical reasons, her consent is required to enable that agreement to be
extended in the manner contemplated; the Secretary of State has consented to the
extension solely for that purpose. The Secretary of State has also agreed to
extend the long stop date for completion of the Government Restructuring
Agreement between the Company and the Secretary of State to 30 April 2005. In
the context of meeting its overarching objectives at this time of nuclear
safety, security of electricity supplies and value for money for the taxpayer,
the Government has stated that it believes that continuity and stability in the
management of British Energy's business in the immediate future is desirable.
The Government has also sought and received assurances from British Energy's
management that any measures taken to manage the Group's working capital will
not adversely affect safety or security of supply. The extension of the
Government Restructuring Agreement is therefore subject to conditions relating
to those two issues.
The proposed extension will also preserve the possibility of extension of the
Creditor Restructuring Agreement beyond 31 March 2005 up to 31 October 2005,
again subject to certain intermediate milestones. However, each of those
parties and majorities who are required to agree the proposed extension would
have absolute discretion as to whether to object to or confirm the continuation
of the extension beyond 31 March 2005 and may require amendments to the
standstill and restructuring arrangements in connnection with the Restructuring
being completed after 31 March 2005. The requisite parties may object to the
continuation of the extension or may not give such confirmations or agree the
terms (if any) upon which they would be willing for the Restructuring to be
completed after 31 March 2005. Furthermore the agreement of the Secretary of
State will be required to extend the Government Restructuring Agreement beyond
30 April 2005.
In any event if it were to become reasonably apparent that the Restructuring
would not be completed by 31 March 2005, we are required to renegotiate the
payments payable to BNFL with effect from 31 March 2005 (subject to completion
of the Restructuring after 31 March 2005) under the BNFL agreements for historic
spent fuel services which have been agreed on the assumption that the
Restructuring would complete and these payments would commence before 31 March
2005. Subject to certain limitations, these payments are expected to be funded
by the Government as part of the Restructuring and consequently any new schedule
would require agreement between us, BNFL and the Government.
Consequently even if the proposed extension becomes effective there can be no
assurance that any extension beyond 31 March 2005 will be available on the
present terms of the Agreed Restructuring or any other terms.
The intermediate milestones to the proposed extension include Bondholders and
RBS passing resolutions approving the Creditors' Scheme by 15 April 2005 and the
Creditors' Scheme becoming effective within 30 business days of grant of the
Creditors' Scheme order or within 15 business days of final determination of any
appeal. These milestones may be extended with the agreement of those parties
and majorities who are required to agree the proposed extension.
Both the Creditor Restructuring Agreement and the Government Restructuring
Agreement are subject to conditions and to earlier termination in certain
events, as previously announced by British Energy.
If such an extension becomes effective and/or if it becomes apparent that the
Restructuring Effective Date will be delayed beyond 31 January 2005, we will
inform Shareholders and Creditors by making an appropriate announcement to a
Regulatory Information Service and the press. For the avoidance of doubt, in
such circumstances Admission may not occur prior to 31 January 2005 and will
remain conditional on the Restructuring being implemented. However, there is no
assurance that the proposed extension of the long stop dates for the
Restructuring will be agreed. If for any reason we are unable to implement the
Restructuring prior to the present or any extended long stop dates and a
replacement standstill cannot be agreed with Creditors shortly thereafter, we
would be unable to meet our financial obligations as they fall due, in which
case we may have to take appropriate insolvency proceedings. If we were to
commence insolvency proceedings, distributions, if any, to unsecured creditors
may represent only a small fraction of their unsecured liabilities and it is
highly unlikely there would be any return to Shareholders.
Admission is conditional upon the Restructuring being implemented.
RECOMMENDATION FOR SCHEME CREDITORS AND BONDHOLDERS
The terms of the Restructuring are complex and you are urged to read
the Creditors' Scheme Circular with care as it contains a great deal of
important information. If you are in any doubt as to any aspect of these
proposals and/or about the action you should take, you should immediately
consult your stockbroker, bank manager, solicitor, accountant or other
professional adviser.
The Restructuring remains subject to a number of important conditions (which are
outlined in the Creditors' Scheme Circular). Notwithstanding the above, the
Company believes that the Restructuring, of which the Creditors' Scheme is a key
element, is in the interests of Scheme Creditors and Bondholders.
Accordingly, the Company supports the Creditors' Scheme and Restructuring and
therefore recommends that Bondholders vote in favour of the Bondholder
Resolutions at the Bondholder Meetings and that Scheme Creditors vote in favour
of the Creditors' Scheme at the Scheme Meeting.
RECOMMENDATION FOR SHAREHOLDERS
We entered into the agreements with Creditors and the Secretary of State in
October 2003 in order to avoid administration in circumstances where no other
viable option was available to the Group and the agreements provide the best
that we could negotiate for Shareholders at the time. We believe the only
alternative would have been for us to take appropriate insolvency proceedings
under which any distributions to Shareholders would have been highly unlikely.
We continue to believe there is no reliable alternative option to the
Restructuring available to us.
The effectiveness of the Members' Scheme and, failing that, the implementation
of the Disposal, is required for the Restructuring to be implemented. Therefore,
if the Members' Scheme is not approved or the Disposal Resolution is not passed,
we are required to implement the Disposal without Shareholder approval. If the
Disposal is implemented, Shareholders will remain holders of British Energy
Shares, but we will have disposed of all of our assets and the British Energy
Shares will be unlisted securities and will not have any value.
As note above, the Restructuring remains subject to a number of important
conditions (which are outlined in the Members' Scheme Circular and will result
in a very significant dilution of the interests of Shareholders. Notwithstanding
the above, the Directors consider that the Restructuring (implemented, if
necessary, by the Disposal) and the resolutions to be proposed at the EGM are in
the best interests of the Group and the Shareholders as a whole.
Even if Shareholders approve the Members' Scheme it may still not become
Effective for other reasons and therefore Ordinary Shareholders are encouraged
to vote in favour of the Disposal as well as the Members' Scheme.
In light of the difficult circumstances faced by the Group, the Directors, who
have received financial advice from Citigroup Global Markets Limited, consider
the Restructuring to be in the interests of the Company. In providing advice to
the Directors, Citigroup Global Markets Limited has placed reliance upon the
commercial assessments of the Directors.
Accordingly, the Directors unanimously support the Restructuring and recommend
that Shareholders vote in favour of the Members' Scheme to be approved at the
Court Meetings and both the resolutions to be proposed at the Extraordinary
General Meeting, that is, the Members' Scheme Resolution and the Disposal
Resolution. The Directors intend to vote in favour in respect of their own
beneficial holdings, amounting to 4,188 Ordinary Shares.
APPENDIX 1 - CREDITOR ALLOCATIONS
For the purposes of the allocation of New Bonds and New Shares among certain of
the Creditors (excluding BNFL) pursuant to the Restructuring, the Company and
such Creditors agreed the claims set out above would be treated as having the
following values:
Claim in respect of: Creditor as at 1 October Claim Amount:
2003: (approx.)
(GBP in m)
The Bonds Bondholders GBP407.9
RBS Indebtedness RBS GBP37.5
Existing EPL Arrangement Eggborough Banks GBP210.0
Enron CFD/Enron Guarantee ECTEF GBP72.0
Total CFD/Total Guarantee TOTAL GBP85.0
TPL Original PPA/TPL Guarantee TPL GBP159.0
The Company and the other parties to the Creditor Restructuring Agreement agreed
the allocation of the New Bonds and the New Shares to be issued pursuant to the
Restructuring in respect of certain Creditors' unsecured claims based upon the
Claim Amounts set out above, and taking into account a number of factors,
including the identity of the relevant debtor and the amounts owed between the
Company and its principal subsidiaries. The allocation of: (i) New Bonds and
New Shares to Creditors (other than BNFL and the Eggborough Banks only to the
extent specified below) if the Members' Scheme does not become Effective; and
(ii) New Bonds and New Shares to Creditors (other than BNFL and the Eggborough
Banks only to the extent specified below) and Shareholders if the Members'
Scheme becomes Effective, is as follows:
New Shares if Members' Scheme New Shares if Members' Scheme
becomes Effective does not become Effective
Name of No. of % of issued No. of New % of issued New Bonds
Shareholder in New New share Shares share (to
British Energy Shares (in capital(4) (in m, capital(4) Creditors
(including Creditors m, approx) approx) only)(2)
and their respective (GBP in m,
allocations as at 1 approx)
October 2003)(1)
Bondholders 286.1 51.0 293.4 52.3 154.0
RBS 26.2 4.7 26.9 4.8 14.2
TPL 78.8 14.0 80.8 14.4 43.5
Total 42.1 7.5 43.2 7.7 23.3
ECTEF 37.2 6.6 38.1 6.8 20.0
Eggborough Banks 76.6 13.7 78.5 14.0 20.0 (3)
Shareholders 14.0 2.5 0.0 0.0 0.0
TOTAL 561.0 100.0 561.0 100.0 275.0
(1) TPL, Total and ECTEF have since assigned certain of their respective
interests under the Creditor Restructuring Agreement and their respective claims
against the British Energy Group to Deutsche Bank AG London (Deutsche Bank)
which is, consequently, a Significant Creditor. We are aware that a proportion
of these interests may have been subparticipated to third parties. The interest
of Deutsche Bank in the Ordinary Shares of British Energy at the date of the
Creditors' Scheme Circular and as expected immediately following Admission, in
so far as is known to us, is disclosed in paragraph 6.3 of Part X of the
Prospectus: "Additional information".
(2) In addition, the NLF will receive GBP275m of New Bonds and a right to
receive the NLF Cash Sweep Payment together with further amounts payable under
the Contribution Agreement.
(3) Excludes GBP150m bond-equivalent payments through the Amended Credit
Agreement.
(4) Percentage of issued share capital immediately following the Restructuring
excluding the impact of the NLF Cash Sweep Payment, the Warrants and Employee
Options.
APPENDIX 2 - INDICATIVE TIMETABLE OF PRINCIPAL EVENTS FOR CREDITORS' SCHEME (1)
The times and dates given below and mentioned throughout the Creditors' Scheme
Circular are based on current expectations and are subject to change. Scheme
Creditors, Account Holders and other persons with interests in Bonds must, in
order to ensure compliance with the deadlines set out in this timetable, ensure
that they also comply with any deadlines and/or notice and/or timing
requirements set by any institutions or settlement system through which
interests in Bonds are held.
Record Date (2) 5:00 p.m. on 29 November 2004
Date of publication of the Creditors' Scheme Circular, 29 November 2004
the Prospectus, the Members' Scheme Circular and notice
convening the Bondholder Meetings
Meeting Dates: all on 22 December 2004
Bondholder Meetings (3)
(2003 Bonds) 9:20 a.m.
(2006 Bonds) 9:40 a.m.
(2016 Bonds) 10:00 a.m.
Members' Scheme Meeting of Ordinary Shareholders 10:30 a.m.
Members' Scheme Meeting of A Shareholders 11:30 a.m.
Latest time and date for receipt of Forms of Proxy from Scheme
Creditors for the Scheme Meeting 12:10 p.m.
Scheme Meeting 12:30 p.m.
Initial Deadline (4) 5:00 p.m. on 7 January 2005
Date of Court hearing of Petitions to sanction the Schemes 14 January 2005
Last dealings in the Company's Bonds 14 January 2005
Restructuring Effective Date (5) 14 January 2005
Admission of New Bonds and New Shares to the 8:00 a.m. on the dealing day
Official List of the UKLA and dealings commence (6) immediately following the
Restructuring Effective Date
Listing of New ADRs on the NYSE, if possible (7) 9:30 a.m. (New York time) on the
trading day immediately following
the Restructuring Effective Date
Distribution of Scheme Consideration as soon as practicable after the
Restructuring Effective Date
If any of the above times and/or dates change, the revised times and/or dates
will be notified to Scheme Creditors and persons with interests in Bonds by
announcement on a Regulatory Information Service and on the Company's website
at: www.british-energy.com.
(1) The times and dates (including those of the Restructuring Effective Date and
the date of Admission) in this timetable are indicative only, are based upon the
Company's current best case expectation and will depend, amongst other things,
on the timetable fixed by the Court, whether any of the Bondholder Meetings, the
Members' Scheme Meeting or the Scheme Meeting are adjourned, the date upon which
the Court allocates a hearing for sanction of the Schemes, whether answers are
lodged in respect of the Members' Scheme or the Scheme and the date on which
steps are taken to make the Schemes Effective. All references to time in the
Creditors' Scheme Circular are to London time except where otherwise stated.
(2) All Scheme Claims are determined as at the Record Date.
(3) To commence at the time fixed or, if later, immediately following the
conclusion or adjournment of the preceding Bondholder Meeting.
(4) The latest date for delivery of Scheme Letters to the Information Agent in
order for Eligible Recipients to participate in the distribution of Scheme
Consideration to be made on the Restructuring Effective Date or as soon as
practicable thereafter. This date may need to be extended in certain
circumstances described in Sections 6, 7 and 8 of Part I of the Creditors'
Scheme Circular and Appendices 3 and 6 to the Explanatory Statement at Part II
of the Creditors' Scheme Circular.
(5) This date is indicative only and based upon the Company's current best case
expectation, and may change as a result of, inter alia, any of the factors
outlined in Note (1) above.
(6) An application has been made to list the New Bonds and New Shares on the
Official List of the UKLA and it is anticipated that the listing of the New
Bonds and New Shares will be obtained so that dealings may commence on the
Business Day immediately following the Restructuring Effective Date.
(7) On 28 September 2004, the NYSE suspended trading in the Company's ADRs and
commenced proceedings to permanently delist the Company's ADRs from the NYSE.
The Company has appealed the NYSE's decision. If the Members' Scheme does not
become Effective, or if neither the Company nor New British Energy are able to
meet the NYSE's relevant listing criteria on or prior to Admission, New ADRs
will not be listed on the NYSE on Admission. In that event, New British Energy
has agreed to take all reasonable steps to apply for a listing of New ADRs on
the NYSE at such time following Admission as New British Energy satisfies the
NYSE listing criteria. In such circumstances, however, New British Energy will
be required to satisfy the NYSE's listing criteria for new securities, including
minimum public float and minimum shareholder eligibility requirements that New
British Energy may not be able to satisfy immediately after Admission.
APPENDIX 3 - INDICATIVE TIMETABLE OF PRINCIPAL EVENTS FOR SHAREHOLDERS (1)
Latest time and date for receipt of green Form of 10.30 a.m. on 20 December 2004
Proxy for the Ordinary Share Court Meeting (2)
Latest time and date for receipt of blue Form of 11.30 a.m. on 20 December 2004
Proxy for the A Share Court Meeting (3)
Latest time and date for receipt of white Form of 12 noon on 20 December 2004
Proxy for the Extraordinary General Meeting
Voting Record Time (4,5,6) 6.00 p.m. on 20 December 2004
Ordinary Share Court Meeting 10.30 a.m. on 22 December 2004
A Share Court Meeting (7) 11.30 a.m. on 22 December 2004
Extraordinary General Meeting (7) 12 noon on 22 December 2004
Creditors' Scheme Meeting 12.30 p.m. on 22 December 2004
Election Return Time (8) 6.00 p.m. on 13 January 2005
Scheme Record Time (9) 6.00 p.m. on 13 January 2005
Disposal Record Time (10) 6.00 p.m. on 13 January 2005
Date of Court hearing of Petition to sanction the 14 January 2005
Members' Scheme
Restructuring Effective Date (11) 14 January 2005
New Shares and Warrants admitted to the Official 8.00 a.m. on the dealing day
List and dealings commence immediately following the
Restructuring Effective Date
Listing of New ADRs on the New York Stock 9.30 a.m. (New York time)
Exchange, if possible (12) on the trading day immediately following
the Restructuring Effective Date
Crediting of New Shares and/or Warrants to CREST the dealing day immediately following
accounts where a valid Form of Election has been the Restructuring Effective Date
received (13)
Date of Court hearing to sanction the New British 18 January 2005
Energy Reduction (14)
Date on which the New British Energy Reduction 18 January 2005
becomes Effective (14)
Despatch of New Share certificates and/or Warrant within 14 days of the
certificates where a valid Form of Election has been Restructuring Effective Date
received
Despatch of cheques and crediting of CREST within 14 days of the
accounts in respect of proceeds of sale of New sale of the New Shares and/or Warrants
Shares and/or Warrants where no valid Form of
Election has been received
(1) These times and dates (including the Restructuring Effective Date and the
date of Admission) are indicative only, are based on the Company's current best
case expectation and will depend, amongst other things, on the timetable fixed
by the Court, whether either of the Court Meetings or the Extraordinary General
Meeting are adjourned, the date upon which the Court allocates a hearing for the
sanction of the Members' Scheme, whether objections are lodged in respect of the
Members' Scheme or Creditors' Scheme, and the date on which steps are taken to
make the Members' Scheme Effective. If any of the these times and/or dates
change, the revised times and/or dates will be notified to Shareholders by
announcement on a Regulatory Information Service and on the Company's website at
www.british-energy.com. All times stated in the Members' Scheme Circular are
London times.
(2) Forms of Proxy for the Ordinary Share Court Meeting not returned by this
time may be handed to the chairman at the Ordinary Share Court Meeting.
(3) Forms of Proxy for the A Share Court Meeting not returned by this time may
be handed to the chairman at the A Share Court Meeting.
(4) Only those Ordinary Shareholders who are entered on the relevant register of
members of the Company as holders of Ordinary Shares at the Voting Record Time
will be entitled to vote at the Ordinary Share Court Meeting.
(5) Only those A Shareholders who are entered on the relevant register of
members of the Company as holders of A Shares at the Voting Record Time will be
entitled to vote at the A Share Court Meeting.
(6) In accordance with Regulation 41 of the Uncertificated Securities
Regulations 2001 and the articles of association of the Company, only those
Ordinary Shareholders entered on the relevant register of members of the Company
as at the Voting Record Time shall be entitled to attend or vote at the
Extraordinary General Meeting in respect of the number of shares registered in
their name at that time. Changes to entries on the relevant register of members
after the Voting Record Time shall be disregarded in determining the rights of
any person to attend or vote at the Extraordinary General Meeting.
(7) To commence at the time fixed or, if later, immediately following the
conclusion or adjournment of the preceding Court Meeting.
(8) New Shares and/or Warrants will only be issued to Shareholders who return
valid Forms of Election before this time.
(9) Only Scheme Shareholders entered on the relevant register of members of the
Company at the Scheme Record Time as holders of Ordinary Shares or A Shares will
be entitled to New Shares and Warrants if the Members' Scheme becomes Effective.
(10) Only Shareholders entered on the relevant register of members of the
Company at the Disposal Record Time as holders of Ordinary Shares or A Shares
will be entitled to Warrants if the Members' Scheme does not become Effective
but the Disposal Resolution is passed.
(11) This date is indicative only and is based upon the Company's current best
case expectation and may change as a result of, amongst other things, any of the
factors outlined in note 1 above.
(12) 28 September 2004, the NYSE suspended trading in British Energy ADRs and
commenced proceedings to permanently delist British Energy ADRs from the NYSE.
British Energy has appealed the NYSE's decision. If the Members' Scheme does not
become Effective or if neither British Energy nor New British Energy are able to
meet the NYSE's relevant listing criteria on or prior to Admission, New ADRs
will not be issued or listed on the NYSE on Admission of the New Shares. In that
event, New British Energy has agreed to take all reasonable steps to apply for a
listing of New ADRs on the NYSE at such time following Admission as New British
Energy satisfies the NYSE listing criteria. In such circumstances, however, New
British Energy will be required to satisfy the NYSE's listing criteria for new
securities, including minimum public float and minimum shareholder eligibility
requirements that New British Energy may not be able to satisfy immediately
after Admission.
(13) New Shares and/or Warrants will only be credited to CREST accounts on this
date if the relevant Shareholder has made a valid Shareholder Election. Warrants
in respect of Shareholders who have made a Deemed Election will be credited to
CREST accounts within 14 days of the Restructuring Effective Date.
(14) The New British Energy Reduction requires the sanction of the Court and the
Court order confirming the New British Energy Reduction to be filed with the
Companies Registrar and registered by him. It is anticipated that these steps
will take place on the dates indicated although the dates may change depending
on, amongst other things, the timetable fixed by the Court.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: November 30, 2004 BRITISH ENERGY PLC
By:____John Searles____
Name: John Searles
Title: Director - Investor Relations