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 12 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: 'Re: Restructuring Update'
dated 12 October 2004
12 October 2004
British Energy plc
Update on restructuring
Satisfaction of Initial Conditions to the Agreed Restructuring
British Energy announces today that the initial conditions to the Creditor
Restructuring Agreement entered into in October 2003 between the Company and
certain creditors have been satisfied. In particular:
- as announced on 22 September, the European Commission has decided to
approve the Government's state aid to the Company in connection with the
restructuring, subject to certain compensatory measures
- the Company's new contracts with BNFL relating to back-end and
front-end fuel services have become unconditional (save only for conditions
relating to completion of the Agreed Restructuring)
- the new arrangements for the financing of Eggborough Power Limited
and the banks' options to acquire the Eggborough Power Station either through a
share or asset purchase in 2010 have been exchanged with the relevant banks and
have become unconditional (again save only for conditions relating to completion
of the Agreed Restructuring)
- all material Inland Revenue clearances have been obtained
- all material unsettled documents have been agreed with creditors
- the Financial Services Authority has consented to the Agreed
Restructuring for the purposes of British Energy Trading Services Limited's FSA
authorisation.
Consequently the Company has in accordance with the Creditor Restructuring
Agreement exchanged the Business Transfer Agreement whereby, if the proposed
scheme of arrangement with members lapses but the Agreed Restructuring
nonetheless becomes effective, the Company's assets will be transferred to
British Energy Holdings plc, which would become an intermediate holding company
of the restructured British Energy group.
Further steps
The Company is now obliged, among other things, to publish Circulars to
shareholders and bondholders and a prospectus for British Energy Group plc (the
proposed holding company of the restructured group) and British Energy Holdings
plc as soon as reasonably practicable.
The Company is working hard to finalise these documents and satisfy the
remaining requirements for publication and expects to publish these documents in
due course with a view to seeking the approval of shareholders and bondholders
at meetings which are expected to be held later this year.
The Creditor Restructuring Agreement will terminate automatically if the Agreed
Restructuring does not become wholly unconditional by 12 noon on 31 January 2005
(or such later date as the Company, the Secretary of State and requisite
majorities of creditors may agree in accordance with the Creditor Restructuring
Agreement) (the "Long Stop Date").
The board does not believe it would be responsible for the board to allow the
Company to be in a situation where it may be forced into an insolvency process
because it cannot extend those long-stop dates. As announced on 23 September
2004 the Company therefore intends to seek to negotiate and agree a binding
extension of the Creditor Restructuring Agreement prior to the requisitioned EGM
convened to be held at 3.00pm on 22 October 2004. At present the Company intends
that the extension should be conditional on the resolutions being passed at the
requisitioned EGM. The board is recommending that shareholders vote against
these resolutions.
Risk factors
The Agreed Restructuring remains subject to a large number of further important
conditions and significant uncertainties, including:
- the Secretary of State's entitlement not to proceed with the Agreed
Restructuring if, in her opinion, the group will not be viable in all reasonably
foreseeable conditions without access to additional financing beyond that which
is committed and will continue to be available when required;
- the restructured group having sufficient working capital for its
present requirements in connection with the listing of the New Shares and New
Bonds;
- there being no material adverse change in the current or future
business or operations, the financial or trading position, profits or prospects
of the group as a whole or of Eggborough Power Limited or which is likely to
have a material adverse effect on the value of the New Bonds, the New Shares,
the CTA Bonds or the new Eggborough arrangements;
- continuation of the standstill arrangements;
- Scottish Court approval and the filing of the order for the scheme
of arrangement with bondholders and The Royal Bank of Scotland plc with the
registrar of companies in Scotland; and
- cancellation of the listings of the Ordinary Shares and A
Shares by the UK Listing Authority ( which is required if the proposed scheme of
arrangement with shareholders lapses and the disposal pursuant to the Business
Transfer Agreement is not approved by shareholders)
- listing of the New Shares and New Bonds
If for any reason the Company is unable to implement the Agreed Restructuring
prior to the Long Stop Date, it may be unable to meet its financial obligations
as they fall due, in which case it may have to take appropriate insolvency
proceedings. If the Company 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.
Contact:
Andrew Dowler 020 7831 3113 (Media Enquiries)
John Searles 01355 26 2202 (Investor Relations)
Find this News Release on our web-site: www.british-energy.com
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 12 2004 BRITISH ENERGY PLC
By:____John Searles____
Name: John Searles
Title: Director - Investor Relations