British Energy to write down assets

Troubled nuclear generator British Energy is to cut the value of its power stations by more than half, reports said yesterday.

The writedowns are expected tomorrow when the group unveils figures for a year in which it needed a stg£650 million Government loan for survival.

One-off charges in the region of stg£3 billion are forecast largely because a slump in power prices has hit the value of assets such as Sizewell B in Suffolk.

At an operating level, lower prices and reduced output will bring losses of stg£250m, say forecasts.

The group, which provides 20% of Britain's electricity, previously valued its eight gas-cooled reactors and one coal-fired station at stg£4.4bn. But it has decided to write down the value of those assets.

Generating prices have fallen as low as stg£16 per megawatt hour, compared with stg£25 a year ago, after more competition was introduced into the wholesale electricity market.

The ensuing crisis prompted concerns of Californian-style blackouts, and fears that up to 5,000 workers could lose their jobs.

It also resulted in intervention from the British Government, including a stg£650m loan and an agreement to cover the company's historic nuclear liabilities up to stg£200m, under a deal that gives it special shareholder status.