MP fears for British Energy HQ's future

Published on Saturday 26 July 2008 16:48

FRENCH energy firm EDF is expected to announce a £12.4bn takeover of British Energy, leading to concerns that its headquarters may be moved out of Scotland.

Nuclear firm British Energy employs around 200 staff at its headquarters in East Kilbride, but Adam Ingram, MP for the area, is concerned about their future if the deal goes ahead.

Ingram said: "My concern is whether EDF will give a commitment to keeping the corporate HQ of British Energy in East Kilbride."

Ingram said he was due to meet with EDF 10 days ago to seek reassurance on the British HQ being retained at its present site, but this has been called off.

Reports suggest that an announcement on the takeover deal is imminent. EDF is thought to be leading the negotiations, with British Gas owner Centrica as a minority partner. It is thought Centrica could end up paying around 3bn for a 25% stake in British Energy.

Centrica is keen to increase its own electricity-generating capacity and to be part of the building of new nuclear capacity.

Last Thursday, British Energy said it was in advanced discussions with a company which it would not name.

British Energy has been part-owned by the UK Government, which now wants to sell its stake. The deal could raise as much as 4bn for the Chancellor.

Given the UK Government's involvement, Ingram is calling on Chancellor Alistair Darling and Des Browne, Secretary of State for Scotland, to "maximise their influence to ensure the corporate HQ is retained in Scotland". He also wants the Scottish Government to say whether it will fight for the HQ to be retained.

British Energy, which owns eight UK nuclear power stations, has been up for sale for months. A number of European energy companies, including Spain's Iberdrola and RWE from Germany, are understood to have looked at British Energy. EDF has already said it would be keen to be involved in the construction of new nuclear plants in Britain.

British Energy has been privatised since 1996. But following suspension of its shares in 2003, it was bailed out by a 410m loan from the Government. The bailout was cleared by the European Commission.

In 2005 the Department of Trade and Industry completed a debt deal with British Energy to help stave off possible bankruptcy, shouldering 5.1bn of power plant decommissioning liabilities.