Brit Energy Csh Share Discussion Threads

[tiraider] 28/9/2004 22:33

Hi Morks,

I'm not even sure that A shares are voting shares, that's not clear, so that could be the reason. A shares in theory pay a fixed amount each year whereas the ords don't. Having said that, the divis or interest (however it is described have/has not been paid anyway).

rgds
tr

[morks] 28/9/2004 21:57

What is the reason that the A shares trade ata discount to the BGY ord shares? I don't think there is a reason - do you?

[morks] 28/9/2004 21:55

I am sure that the A shares get treated the same as the ord shares in the restructuring .... can anyone find a link to prove this? but they trade at a discount to the ord price ... Why ?

[tiraider] 01/8/2004 16:57

Polygon proposal

[tiraider] 01/8/2004 13:32

British Energy refuses to back down
Sarah Bridge, Mail on Sunday
1 August 2004

THE board of struggling power company British Energy faces a dressing down from angry investors at a stormy annual meeting in Edinburgh this Thursday.

Shareholders are furious at a Government-backed £5 billion restructuring of the company that would see the equity holders lose out in favour of the company's bondholders.

While the restructuring is not up for discussion, shareholders are using the event to call on the board to reconsider the deal.

Hedge fund Polygon, which has a 5.6% stake in BE, told Financial Mail: 'We are going to make a lot of noise. The board just does not want to know, but we are going to be making our views very clear and will be asking them to reconsider their plans.'

Polygon is urging shareholders to vote against the restructuring later this year and to back a rival plan in which investors would put more money into the business and buy out the creditors.

Other investors, such as fund group Invesco Perpetual, are keen to get their point across. The board also faces the wrath of 230,000 small investors who have seen the shares lose 90% of their value since 1996. These shareholders will end up with just 2.5% of the company if the plans are voted through at a later meeting.

A spokesman for British Energy said that there was no going back.

'We had to sign a binding agreement with the creditors in October, without which the company would have gone into administration and shareholders could have ended up with nothing,' he said

If the vote goes against the plan, BE chairman Adrian Montague, who could receive a £700,000 bonus for the restructuring, will delist the company.

[tiraider] 28/7/2004 08:14

A lot of ground to make up

[tiraider] 23/7/2004 11:40

Hi Sandy,

The header info is a copy and paste from the BGY website. You're right; no dividend was paid in 2003 for reasons most people are aware of.

Will they or won't they pay up this year? That is the great risk with this stock. If they don't, the stock pays nothing and has no voting rights. If they do then the yield is 15.5% at this price AND will the missed payment be made?

So you have to look at the fundamentals and outlook for BGY and form an opinion about both classes of stock.

Rgds
tr

[sandbank] 21/7/2004 12:04

Would anyone on this thread say that the BGYA shares are a better bet than ordinary BGY shares?

As I it understand anyone buying BGYA shares today - (incontrast to what is said in the header of this thread) receives no dividend at all - and anyway no dividend has been paid since 2002! Is that right?

[tiraider] 11/7/2004 17:22

hammavoe,

Thx very much, I hadn't seen that article or news. On the same basis, (bonds gone from 25 to 167 = 6.68 times) BGYA have some way to go to catch up...
3.25 x 6.68 = 21.71p Now that's a nice thought! Add in the increased LIBOR and...

Rgds
Tr

[hamnavoe] 11/7/2004 17:06

tr. thanks for reply.
have you read the piece in the Scotsman newspaper about Deutche Bank
buying 200m stg worth of Bgy bonds indicating a belief in the future
of the company.
regards hamnavoe. ............

[tiraider] 11/7/2004 11:46

hamnavoe;

Thanks for popping in!

With a large spread, it is difficult to trade this stock. However it tends to move in large percentages, both UP and DOWN! So you have to increase your normal stop loss to accommodate the large changes.

It is both stock (BGY) and interest rate sensitive and at the moment as the outlook for both is to increase then there is a double benefit and this stock should outperform BGY.

You have to take a view on both issues and invest as you think appropriate. INVEST is the operative word though as money in this stock may be 'dead' money for quite a while.

When it dips, your broker will be able to call the MMs and buy whatever is available which may not be as many as you want, but a price well inside the spread is achievable. Vice versa if you want to flog a few.

An issue that I have tried to clarify without success is what happens if BGY shares are diluted? Well even if this stock is diluted, will each share still be entitled to it's payment? An email to BGY went unanswered although it was acknowledged.

So it's a risky play, that only deserved a small percentage of my dosh, bought on a down day as described above.

Hope that helps, if you can supply any further info please post it.
rgds
tr

[hamnavoe] 10/7/2004 17:10

tiraider. what are the pro's and con's of trading BGYA tia.
regards hamnavoe. ..........

[tiraider] 10/7/2004 10:46

Evening Standard article

[tiraider] 07/7/2004 09:52

Blair reignites nuclear debate

American lobbying adds to pressure as PM battles to keep controversial energy option on climate change agenda

Patrick Wintour and Paul Brown
Wednesday July 7, 2004
The Guardian

Tony Blair yesterday signalled that Britain may have to build a new generation of nuclear power stations to meet the challenge of climate change.

Appearing before a committee of senior MPs, he disclosed that America was pressing Britain to look again at the nuclear option, including a new generation of stations that some claim will be safer and cheaper. Britain would have to take "some very difficult decisions", the prime minister said.

Mr Blair also revealed that the door to a fresh round of nuclear stations had been kept open in last year's energy white paper at his personal insistence. "I have fought long and hard, both within my party and outside, to make sure that the nuclear option is not closed off," he told the Westminster session.

Even though Mr Blair insisted big political and economic hurdles remained in the way of further nuclear stations, his remarks were hailed by pro-nuclear MPs, but caused consternation among environmentalists.

Mr Blair said the evidence was now overwhelming that climate change was the single biggest long-term problem facing the country, and conceded the world was nowhere near finding a mechanism to cut carbon dioxide emissions by the government's target of 60% by 2050.

He told MPs that there was no way nuclear power could be removed from the agenda "if you are serious about the issue of climate change".

His argument is echoed today in a joint letter to the Guardian from Michael Meacher, the former Labour environment minister, and the former Conservative environment secretary, John Gummer. The pair argue that "a failure to take decisive action at home will undermine the UK's credibility".

Mr Blair said the question did not arise of nuclear power "for decision today but will arise within the next few years - whether as your existing nuclear power stations run down you try and replace that and replace it with the latest technology which round the world is developing in a different way from the generation of nuclear power stations that we have now". He revealed he was being lobbied by the US to look at nuclear power as the best way of cutting carbon emissions.

But Mr Blair repeatedly stressed that no decision had been made in government and the nuclear industry had to do more to meet the public's concerns about safety and costs. "I think we have got to be realistic about this. Unless we overcome these two hurdles our progress will be limited," he said.

Mr Blair's remarks reflect the battle between ministers in the departments of trade and industry and environment. The energy white paper in February 2003 came down firmly in favour of energy effi ciency and renewables being given priority as the best option for Britain's future. Nuclear energy was not ruled out forever but put on hold for at least five years.

In the last six months the debate has been reopened by some environmental gurus such as James Lovelock, originator of the Gaia theory, who said that Britain and the world could not reduce carbon dioxide emissions by the 60% scientists see is needed by 2050 without the help of nuclear power.

The UK is committed to reducing its 1990 greenhouse gas emissions by 12.5% by 2010, and is on course to do so. The bigger manifesto commitment made in 2001 to cut carbon dioxide emissions by 20% by the same time was later reduced to an aspiration and looks unlikely to be met. Government policy in the white paper was to get to a 60% reduction by 2050.

The problem with nuclear power is that it is both expensive and the industry takes a decade or more to find sites and get planning permissions. The latest design, the AP 1000, which has been developed by a British Nuclear Fuels-owned company, is not licensed to operate in Britain. Reaction from environmentalists to Mr Blair's comments was amazement. Tony Juniper, director of Friends of the Earth, said: "It took months to hammer out a policy in the white paper and nothing has happened since to change the basics, which were that energy efficiency and renewables were the best bet. It would be 15 years before there was one kilowatt of energy from a new nuclear station."

[tiraider] 27/6/2004 13:25

thanks waldron
rgds
tr

[waldron] 20/6/2004 21:45

British Energy forced to wait for EC ruling on rescue package

IAIN DEY DEPUTY BUSINESS EDITOR


BRITISH Energy has warned that it will have to wait until the autumn to discover whether or not the European Commission will approve its government-backed rescue package.

The East Kilbride-based nuclear power group yesterday reported a sharp turnaround in its financial performance, racking up pre-tax profits in the year to 31 March of £232 million compared with losses of £4.3 billion a year earlier.

Its earnings were boosted by lower production costs and a recovery in wholesale electricity prices from a year ago.

But the restructuring plan that saved the group from administration - which involved banks and bondholders agreeing to write off £1.3bn in debt - could still be derailed if the commission decrees that the government’s involvement constitutes illegal state aid.

Although a decision had been expected by the company before the summer, delays in passing documents between Whitehall and Brussels have held up the process.

Trade Secretary Patricia Hewitt revealed in a statement to parliament yesterday that the government had not managed to get "the necessary information" to the commission in time for a summer decision - "due principally to the need to finalise some financial calculations in relation to the funding of British Energy after restructuring".

British Energy chairman Adrian Montague said significant progress had been made by the group. He continued: "It is intended that the proposed restructuring be implemented in the current financial year. But there is a great deal to do in order to achieve this and the size of the task should not be underestimated."

The government kept British Energy afloat through a series of loan agreements as it teetered on the brink of insolvency. As part of the restructuring proposals, the tax-payer meets some of the decommissioning liabilities at British Energy’s plants - estimated by the government at £3.3bn.

If the EC rules against the bail-out, British Energy would be renationalised. The Department of Trade and Industry also has the right buy any of British Energy’s power stations for £1 if the company decides to begin decommissioning work before previously agreed dates.

Along with Hunterston power station in Ayrshire and the Torness plant in East Lothian, British Energy runs four other UK nuclear power plants.

The 2003 losses were inflated by a £3.6bn one-off accounting charge to cover write-downs on the value of the group’s aging generators.

Power prices have recovered in recent months, although the company has not fully benefited because of its decision to forward sell much of its output. It has also been hit by the impact of unplanned outages during the second half of the financial year.

Despite those factors, operating profits of £66m were recorded in the second half, against losses of £9m in the first half. The overall figure of £57m compared with profits of £7m last year.

Although the group’s battered shares were off as much as 6 per cent in early trading, they closed up 0.8 per cent at 12.53p. The group now has a market value of about £82m.

[waldron] 20/6/2004 21:39

good luck with your thread tir.

[tiraider] 05/6/2004 18:59

The chart looks pretty good, and once the world realises that it's green ambitions of abolishing nuclear energy are impracticable, (given the current oil crisis) further recovery in these little known shares will take place.

[tiraider] 05/6/2004 18:51

What are British Energy A shares?
extract from the British Energy website,

Significant Dates
10th July 1996 First installment of £1 in respect of shares
16th September 1997 Second installment of 98p in respect of shares
30th July 1999 Bonus shares issued* (1 for 15) to shareholders who held shares since privatisation
9th August 1999 Capital Reorganisation

*No new share certificates issued until after capital reorganisation.

Return of Value

On 12 May 1999 we stated that we proposed to return value of approximately £432m to shareholders, this proposal was approved at a Extra Ordinary General Meeting on 15 July 1999.

As a result British Energy undertook a capital reorganisation under which each shareholder received one undesignated share of 40p and one A share of 60p. This was then followed by a capital consolidation which shareholders received 43 new ordinary shares of 44 28/43p for 48 undesignated shares and were given three options in relation to the A shares:

Sell back to British Energy for 60p per share by a specified date

Receive a single dividend of 60p following which the A shares
became unlisted deferred shares with extremely limited rights and negligible monetary value

Keep the A shares and receive a continuing dividend of 75% of 12 months LIBOR payable on the principal amount of 60 pence per share with the dividends being paid in August of each subsequent year.
In regards to option 3 the A shares are listed on the London Stock Exchange and they can be bought or sold at the prevailing price.