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
October 10, 2003
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: Proposed Disposal dated 10 October 2003
10 OCTOBER 2003
British Energy plc ("British Energy")
Proposed Disposal of Interest in AmerGen to Exelon
The Board of British Energy (the "Board") announces that, following the decision
by Exelon Generation Company, LLC ("Exelon") to exercise its right of first
refusal announced on 3 October 2003, British Energy and Exelon have today
entered into an agreement to dispose of British Energy's entire 50 per cent.
interest in AmerGen Energy Company, LLC ("AmerGen") for approximately US$277m.
The terms of the acquisition will be the same as those agreed with FPL Energy,
LLC ("FPL Energy") and announced by British Energy on 11 September 2003. Exelon,
a wholly owned subsidiary of Exelon Corporation (NYSE: EXC), owns the remaining
50 per cent. interest in AmerGen. As a result of entering into this agreement,
British Energy will terminate its agreement with FPL Energy and, upon completion
of the disposal, pay break fees of up to US$8.295m to FPL Energy.
Closing of the proposed transaction with Exelon is subject to approvals from The
Secretary of State for Trade and Industry (the "DTI"), the Nuclear Regulatory
Commission, the Federal Energy Regulatory Commission (the "FERC") and the
Federal Communications Commission and requires clearance under the
Hart-Scott-Rodino Antitrust Improvements Act and the New Jersey Industrial Site
Recovery Act. In addition, the parties will not be obliged to complete the
transaction if a material adverse effect (as defined in the agreement) or
certain other specified adverse effects occur prior to closing. Completion of
the transaction is also subject to approval of the disposal of British Energy's
interest in AmerGen by the shareholders of British Energy, where required.
The Board expects that it will require approximately six months to obtain the
necessary regulatory approvals for a disposal of its interest in AmerGen to
Exelon.
If the sale to Exelon is completed, British Energy expects to receive cash
consideration of approximately US$277m, subject to adjustments relating to
working capital levels, unspent nuclear fuel, capital expenditures and low-level
waste disposal costs at the time of closing, and prior to paying break fees to
FPL Energy. The proceeds of the transaction are expected in the first instance
to be used to repay the sums made available to British Energy under the DTI
credit facility entered into on 26 September 2002 and subsequently extended (the
"Facility") (if any) and the remainder will be retained to build cash reserves
for working capital and collateral purposes.
AmerGen is engaged in the ownership and operation of nuclear power generation
plants in the United States of America. As at 31 March 2003, British Energy had
recorded its 50 per cent. interest in AmerGen in its accounts, where it is
classified as an "Interest in joint venture", at a net asset value of GBP71m.
AmerGen's loss before tax (post-exceptionals) in the year ended 31 March 2003
was GBP5m. Taking account of parent company funding and working capital in
AmerGen's US holding company that is being disposed of as part of the
transaction, the total net asset value of assets as at 31 March 2003 subject to
the transaction was GBP67m with an attributable loss before tax
(post-exceptionals) for the year ended 31 March 2003 of GBP7m.
The sale of British Energy's interest in AmerGen is a key element of the
proposed restructuring of British Energy and its subsidiaries (the "Group"). The
terms and conditions of the proposed restructuring were contained in an
announcement made by British Energy on 1 October 2003.
The Board believes that such a restructuring of the Group offers the best
available opportunity to achieve the long term financial viability of the Group.
However, the proposed restructuring is subject to a significant number of
conditions which are explained in the announcement made by British Energy on 1
October 2004.
If the transaction is not completed or if the broader restructuring proposals
with creditors and the DTI cannot be implemented because the required approvals
for the restructuring are not forthcoming or if the assumptions underlying the
restructuring proposals are not fulfilled or the conditions to the Facility or
restructuring are not satisfied or waived within the timescales envisaged,
British Energy may be unable to meet its financial obligations as they fall due
and consequently may have to take appropriate insolvency proceedings. If
insolvency proceedings are commenced, the distributions to unsecured creditors
may represent only a small fraction of their unsecured liabilities and there is
highly unlikely to be any return to shareholders. Even if the restructuring is
completed, based on the terms of the proposed restructuring agreed with
creditors and the DTI and announced on 1 October 2003, the return for existing
shareholders will represent only a very small percentage of the equity of the
restructured group and their existing positions will be very significantly
diluted.
Notes to Editors:
AmerGen is an "Exempt Wholesale Generator" under the Public Utility Holding
Company Act of 1935, a "public utility" under the Federal Power Act and has a
market-based rate wholesale power sales tariff on file with the FERC.
AmerGen was established on 18 August 1997 by PECO Energy Company ("PECO") and
British Energy to acquire and operate nuclear-powered generating plants and
other associated assets in the United States. PECO's interests in AmerGen were
transferred to Exelon in connection with its merger with Unicom Corporation in
2000.
AmerGen owns three nuclear power generation plants in the United States:
- Clinton Power Station, a 1,017 Net Average Megawatts Electrical ("MWe")
Boiling Water Reactor, purchased from Illinois Power Company on 15
December 1999
- Three Mile Island Nuclear Station Unit 1, an 837 MWe Pressurized Water
Reactor, purchased from FirstEnergy Corp. ("FirstEnergy", which includes
FirstEnergy Corp., its predecessors and subsidiaries, including GPU, Inc.)
on 20 December 1999
- Oyster Creek Nuclear Generating Station, a 627 MWe Boiling Water Reactor,
purchased from FirstEnergy on 8 August 2000
Exelon Corporation is the utility holding company for Commonwealth Edison
Company ("ComEd") and PECO Energy Company ("PECO"), which are electric
utilities. Exelon, through its subsidiaries, operates in three business
segments: energy delivery, which consists of the retail electricity distribution
and transmission businesses of ComEd in northern Illinois and PECO in
southeastern Pennsylvania and the natural gas distribution business of PECO in
the Pennsylvania counties surrounding the city of Philadelphia; generation,
which consists of electric generating facilities, energy marketing operations
and equity interests in Sithe Energies, Inc. and AmerGen; and enterprises, which
consists of competitive retail energy sales, energy and infrastructure services,
communications and other investments weighted towards the communications, energy
services and retail services industries.
Contacts:
Paul Heward
+44 1355 262 201 (British Energy, Investor Relations)
Andrew Dowler
+44 20 7831 3113 (Financial Dynamics, Media)
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: October 10, 2003 BRITISH ENERGY PLC
By:____Paul Heward____
Name: Paul Heward
Title: Director - Investor Relations