Buy British Energy
argues Evil Knievil of www.t1ps.com

British Energy has paid for many a lunch over the past couple of years. I have been shorting it aggressively Convinced that it was going bust I regarded it as the quickest way of making money since Cherie Blair and her ghastly husband turned freeloading into an art form. But, while the liar-in-chief and the wicked witch continue will continue to carry on sponging forever, other things have changed and I am now aggressively long of British Energy to the tune of five million shares. I admit my timing was not perfect - I am only running at break-even at this stage but I am expecting to trouser it in a big way over the next six months. In putting together this bull case I am most indebted to the publication Utilities Week - a must read in every household and whose words I have cribbed liberally.

The Bail Out

British Energy runs nuclear power stations. As such it has high fixed costs and always has a potential liability for decommissioning its plants when they come to the end of their useful lives. Its problems started when a slump in electricity prices meant that it was not covering those fixed costs which exposed the fact that its borrowings were unsupportable. It was this that allowed me to profit so greatly on the short tack.

Then the Government stepped in with a "rescue" plan. Surprisingly for a body which shows an ability to waste taxpayers' cash of unmatched proportions this did not involve a huge bail out. Instead it involves the Government, bond-holders, BNFL, other creditors and an array of vastly overpaid parasites (i.e. advisors on a success only fee) reconstructing the business such that equity holders will be diluted to obliteration. This motley crew are determined that their proposed reconstruction goes ahead and the board seems happy to play ball but any such proposal must be agreed by shareholders and I think that the times they are a changin'.

If the reconstruction proceeds, existing shareholders will be diluted to 2.5% of the equity plus warrants to buy a further 5%. Since 65% of free cash flow will be diverted to the Nuclear Liabilities Fund (i.e. decommissioning), this 7.5% becomes an economic interest of just 2.6%. This is clearly not an attractive proposition and if it goes through the shares, at 7.65p may be overvalued. However, I think that even on the current reconstruction terms, 15p-25p will prove to be the eventual outturn.

In the interim results, announced in December, and again with the latest quarterlies British Energy warned shareholders that if they did not support the proposed reconstruction by approving either a scheme of arrangement or the disposal of the company, the shares would be de-listed and the reconstruction completed anyway. But if it can be shown that the company is a going concern without the reconstruction, Turkey's won't vote for Christmas and shareholders (who have to approve any deal) will block it.

The Upside from a No Vote

The disposal of British Energy's 50% interest in Amergen, netted 160 million pounds. This repaid the 94 million owed to the Government so removing its ability to force insolvency by calling in its loan. It leaves three groups of creditors to be satisfied from the remaining 66 million pounds, the 20 million pounds of other cash, any cash flow from trading since 12th December and any cash that can be released from the 359 million pounds tied up in trading collateral.

Group one are the bondholders, owed 408 million. The 2003 bonds have matured, but British Energy can probably pay the 110 million pounds owed to the holders from its cash. The 2006 and 2016 bonds may be in default even though their interest continues to be paid. They are very generously treated in the proposed reconstruction, as a result of which the bonds are trading well above par. They may have the right to put British Energy into receivership if the reconstruction is voted down, but it would not be in their interest to do so. In a liquidation, they would receive very little, whereas, if British Energy continues to trade, they will continue to receive interest and can be repaid in full on redemption.

The second group of creditors are the Banks who lent 475 million pounds to finance the purchase of the 2000 MW coal-fired Eggborough power station. They are being offered 150 million pounds in new bonds and 14% of the new shares being issued, worth some 150 million pounds at 5p each. The value of Eggborough has risen significantly in the last year. It is half the size of the Drax power station, and, like Drax, is being fitted with a Flue Gas Desulphurisation plant, due for completion this year. In December, Drax's creditors rejected an offer by International Power to buy up to 36% of its equity and 15% of its debt. Since then, the value of Drax's debt in the secondary market has continued to rise, and Drax is now valued in the market at about 1.25 billion pounds . This suggests that Eggborough is worth closer to 600 million pounds than the 300 million pounds it is valued at in the secondary debt market. If the reconstruction fails, the Eggborough banks will be significantly better off whether or not the power station is sold.

The third group of creditors are the three parties claiming 316 million pounds in relation to onerous trading contracts. Two of the contracts, accounting for half the total, were terminated in 2003, making their claims payable. The third contract, with Teeside Power, may be renegotiable. The sharp rise in electricity prices makes this contract to buy high-priced electricity no longer a financial liability, but 158 million pounds must still be found to satisfy the other two.



In the short term, British Energy would struggle to satisfy these creditors, but given time, the prospects look better. 75 million pounds was absorbed into working capital in the first half of 2003/4, which may be reversible. The Board is "exploring initiatives to reduce the demand for trading collateral," which should diminish as the forward sales run out. Halving the collateral would release 180 million pounds.

And Critically...

The strength of electricity prices means that British Energy will be highly cash-generative when it can take advantage of current prices, and only half of output for the year to 31st March 2005 has been sold forward at low prices. Implementation of the Emission Trading Scheme, due to start on January 1st, 2005, could add a further 10% to electricity prices, increasing profits and cash flow by 160 million pounds per annum. What British Energy's shareholders need is time.

Fortunately, the bureaucracy and delays of the European Union are working in our favour. The EU is not expected to reach a decision on the restructuring until the middle of 2004, delaying a shareholder vote until the Autumn. With luck, if it runs true to form the EU will take longer, postponing the vote until 2005. This gives more time for cash flow to build up and for the prospects to look more secure. It also gives larger shareholders time to prepare an alternative plan. This is necessary because British Energy is firmly committed to the restructuring. Shareholders cannot look to their Board to safeguard their interests and indeed should think about handing out P45s liberally to the top table.

While negotiating with the creditors is the short-term priority of such a plan, there are other considerations. If the reconstruction is voted down, it is quite possible that the government will force the reconstruction through by Act of Parliament, leaving shareholders with nothing. But does this sordid little Government really want to repeat its Railtrack fiasco with an election looming?

The key to this gamble - and I admit it is such - is that electricity prices are increasing which makes a big difference to cashflow. If shareholders are given time to work out an alternative plan, British Energy will still need to raise cash via a rights issue but it is not ludicrous to suggest that current investors will be left owning 65% of the company rather than 2.5%. In other words the shares would be worth 150p each and possibly rather more.

There are obvious risks. The board might steamroller shareholders into accepting a deal that is patently not in the interests of shareholders. Electricity prices might fall. Big shareholders might cave in cravenly. The EU might whizz through approval giving shareholders no time to organise. Okay, there is no risk of the EU being efficient that was my little joke. But there are risks. If I am wrong these shares could conceivably be overvalued but could even in this scenario head up towards 20p. But if I am right 150p here we come. On a risk reward basis that looks good to me.

Key Data

EPIC: BGY
NMS: 150,000
Market Cap: 47 million pounds
Market: Full
Spread: 7.6-7.7p

RNS Number:8698V
British Energy PLC
26 February 2004

British Energy

26 February 2004

RESULTS FOR THE QUARTER

ended 31 December 2003



Key Points



O Good progress on restructuring continued, with sale of AmerGen interest
(US$277m). Provisional gain on sale of #35m. The restructuring remains subject
to significant uncertainties

O Group operating profit, after exceptional items, of #12m in the quarter,
compared with loss of #21m in the nine month period

O Total UK output of 17.3 TWh in the quarter (down 4% year on year); 52.7
TWh for the nine month period (up 6% year on year)

O Operating cash inflow, after capex, was #1m in the nine month period

O Net debt was reduced by #167m to #454m in the quarter, primarily as a
result of the AmerGen net proceeds. The HMG Credit Facility has reverted to
#200m



Update since 31 December 2003



O Total UK output of 59.5 TWh up to 31 January 2004 (up 5% year on year)

O Revised UK nuclear output forecast for the year of around 65.5 TWh
confirmed (up 3% year on year), compared with 63.8 TWh in 2002/03

O Dispute with Siemens settled. Siemens to pay #18.3m to British Energy



O Nil drawings under HMG Credit Facility as at 24 February 2004



Key financials are shown below:
3 Months Ended 9 Months Ended

31 Dec 2003 31 Dec 2003

#m #m
Group turnover 369 1,046
Group operating profit/ (loss) 12 (21)
Loss before tax (10) (81)
Achieved price (excluding misc. income) #17.6/MWh #16.4/MWh
Total operating costs (excluding revalorisation) #17.2/MWh #16.7/MWh



Adrian Montague, Chairman, said:



"We continue to make good progress with the Company's restructuring, with the
sale of our interest in AmerGen for US$277m being the highlight of the period.
Whilst a decision by the European Commission on restructuring is pending, we are
focussing on improving British Energy's operational reliability and financial
capability."



Management will host a conference call for analysts and investors today - 26
February2004 - at 1600 UK time (1100 - Eastern Standard time).



The conference call can be accessed by dialling, UK dial in: 0845 113 0049,
International dial in: + 44 (0) 1452 542 303, US dial in: 1 866 389 9778. There
will be a replay facility for 14days, UK Dial in: 0845 245 5205, International
dial in: + 44 (0) 1452 55 00 00, Pin: 1032694#





For further information please contact:


Paul Heward British Energy 01355 262201
Andrew Dowler Financial Dynamics 020 7831 3113



Notes for editors



The information in this presentation is drawn from the unaudited third quarter
results of British Energy for the 3 months ended 31 December 2003. This press
release is a summary and reading it is not a substitute for reading the third
quarter results in their entirety.







ITEM 1 : MANAGEMENT'S DISCUSSION AND ANALYSIS - FINANCIAL CONDITION AND RESULTS
OF OPERATIONS



OVERVIEW



This report contains British Energy's first publication of quarterly results.



In the following discussion the 'three-month period' or the 'quarter' refer to
the three months ended 31 December 2003 and the 'nine-month period' or the '
period' refer to the nine months ended 31 December 2003 unless otherwise stated.
In this discussion reference to 'British Energy' or the 'Company' are to
British Energy plc. References to the 'Group' are to the Company and its
subsidiaries.



British Energy continues to make good progress with its proposed restructuring,
the terms of which were announced on 1 October 2003 (the 'Proposed
Restructuring'). The sale of the Company's 50% interest in AmerGen to Exelon,
the Group's joint venture partner, for consideration of US$277m, pending
finalisation of working capital and certain other closing adjustments, was
successfully completed on 22 December 2003. The sale was an important milestone
and approximately #94m of the proceeds were used to repay fully the amounts
outstanding under the revolving credit facility from the UK Government (the '
Credit Facility'). A provisional profit of #35m on the sale has been recognised
in these accounts. As at 31 December 2003 and 24 February 2004 there were no
drawings under the Credit Facility. Following its sale of AmerGen, British
Energy has interests in eight nuclear power stations and one coal-fired plant in
the United Kingdom.



As announced during the quarter, the Company's operating performance was
adversely affected by the unplanned outages of both reactors at Heysham 1 and an
extension to the statutory outage at Sizewell B. The resultant loss of output
in the full year is anticipated to amount to some 3.4 TWh, equivalent to some
#83m of lost profit contribution inclusive of imbalance costs (previously
estimated at a gross cost of #95m, before associated fuel savings). The output
lost in the three-month period was some 2.1 TWh which was equivalent to some
#50m of lost profit contribution inclusive of imbalance costs. Sizewell B
returned to service on 15 November 2003, and both units at Heysham 1 commenced
their return to service on 14 February. In December 2003 the Company announced
the reductionin its full year nuclear output forecast to around 65.5 TWh from
the previously forecast level of 67.0 TWh, taking account of the impact of these
outages, other unplanned outages in the year to date and existing allowances for
unplanned outages. The Company continues to expect that total UK nuclear output
will remain around 65.5 TWh for the year ended 31 March 2004. This compares
with 63.8 TWh achieved in the prior year.



On 17 December 2003, the Company announced that it was taking forward plans to
improve the operational performance and reliability of its nuclear plants. The
first implementation stage has now commenced, with the emphasis on leadership
and organisational effectiveness, and the Company will give a further update on
progress at the time of its next preliminary results.



By December 2003, the market price for annual forward baseload contracts had
increased by some 25% over those prevailing in March 2003. The Company did not
benefit to any great extent from these increases because of the high proportion
of fixed price contracts in place, which provide protection against falls in
market price and were executed to meet the objectives of the Proposed
Restructuring. However, the price increase has put pressure on liquidity as the
Company has been required to commit cash to fund collateral for trading
counterparties. Fixed price sales contracts are currently in place covering
over half of planned output in 2004/05 at an average price of #18.7/MWh.



As at 31 December 2003 and 24 February 2004 the Company had cash, including
amounts posted as collateral, amounting to #429m and #496m respectively, of
which #338m and #315m were deposited as collateral in support of trading
activities.



On 4 February 2004 the Company announced the settlement of a long-standing
dispute with Siemens Power Generation Limited ('Siemens') whereby Siemens agreed
to pay the Company #18.3m.



On 12 February 2004 British Energy received a notice of warranty claims from the
consortium which purchased the Group's 82.4% interest in Bruce Power alleging
breach of certain warranties and representations relating to tax and to the
condition of certain plant at the Bruce power station. Further details are
provided in the 'Contingent Liabilities' section below.



In accordance with the policy outlined and re-stated below no dividend has been
declared for the period.



The Proposed Restructuring remains subject to a large number of significant
uncertainties and important conditions, including receipt by the Secretary of
State for Trade and Industry (the 'Secretary of State') of a satisfactory
notification from the European Commission (the 'Commission') that in so far as
the proposals involve the grant of State Aid by the UK Government, such aid is
compatible with the common market. The Secretary of State expects to receive
this notification by mid 2004. Furthermore, the Secretary of State is entitled
not to proceed with the Proposed 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.



If for any reason British Energy is unable to implement the Proposed
Restructuring 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
British Energy 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 that there would be any return to
shareholders. Even if the Proposed Restructuring is completed, the return, if
any, for shareholders will represent a very significant dilution of their
existing interests.



Key Points on Results



* The Company generated an operating profit, after exceptional
operating items, of #12m in the three-month period and an operating loss, after
exceptional operating items, of #21m in the nine-month period. Included in the
operating results were exceptional operating items producing net charges of #3m
and #27m in the three-month period and the nine-month period respectively
(further detail is provided in Note 3 of the financial statements).



* Losses before tax of #10m and #81m were reported in the
three-month period and nine-month period respectively.



* Nuclear output was up by 5% to 48.0 TWh in the nine-month
period, compared with 45.9 TWh in the equivalent period last year. Nuclear
output performance in the three-month period was down by 6% to 14.7 TWh,
compared with 15.6 TWh in the equivalent period last year. The decline in the
quarter was primarily attributable to unplanned outages at Heysham 1 and
Sizewell B as discussed above.



* Achieved prices, excluding miscellaneous income, were #17.6/
MWh and #16.4/MWh for the three-month period and the nine-month period
respectively. The higher prices achieved in the quarter primarily reflect
market price seasonality.



* Total operating unit costs, excluding revalorisation (which
is calculated by dividing the total UK operating costs, net of exceptional items
and energy supply costs, by total output), were #17.2/MWh and #16.7/MWh for the
three-month period and nine-month period respectively. The higher unit costs in
the quarter were due to a high proportion of the costs being fixed in nature and
incurred during a period of unplanned outages.



* Operating cash inflow, after capital expenditure, was #1m for
the nine-month period. Net debt was reduced in the quarter by #167m to #454m,
primarily as a result of the net proceeds from the sale of AmerGen.



* A contingent asset of #259m has been accumulated but not
recognised in the financial statements for the period arising from the revised
BNFL contracts, inclusive of #137m of benefit for fuel consumed in the
nine-month period (of which #39m arose in the quarter).



EXPLANATORY NOTES



Certain statements in this document are 'forward-looking' statements (as defined
in Section 21E of the US Securities Exchange Act of 1934).



Such forward-looking statements include, amongst others:



* Statements concerning the Proposed Restructuring and its
effect on the Group's business and financial condition or results of operations.



* Other matters that are not historical facts concerning the
Group's business operations, financial condition and results of operations.



These forward-looking statements involveknown and unknown risks, uncertainties
and other factors which are, in some cases, beyond the Group's control and may
cause its actual results or performance to differ materially from those
expressed or implied by such forward-looking statements. Due to the
uncertainties and risks associated with these forward-looking statements, which
speak only as at the date hereof, the Company is claiming the benefit of the '
safe harbour' provision contained in Section 21E of the US Securities Exchange
Act of 1934.



This is the first set of quarterly results to be published by British Energy and
therefore no comparative quarterly information is provided for the equivalent
periods in the previous year.



The following discussion and analysis should be read in conjunction with the
Financial Statements for the three and nine months ended 31 December 2003 and
the Notes thereto which are included in this report. The full Financial
Statements for the year ended 31 March 2003 and the Notes thereto are not
included in this report but are available on the British Energy website
(www.british-energy.com).



British Energy's Financial Statements have been prepared in accordance with UK
GAAP. A detailed description of the differences between UK GAAP and US GAAP as
they relate to the Group are set out in Note 37 of the Form 20-F for the year
ended 31 March 2003 which is also available on the British Energy website.



KEY EVENTS IN THE PERIOD



Restructuring Developments



Sale of AmerGen



On 22 December 2003, British Energy completed the disposal to Exelon of its
entire 50% interest in AmerGen. At closing, British Energy received
consideration of US$277m subject to adjustments relating to working capital
levels, stocks of unspent nuclear fuel, capital expenditures and low-level waste
disposal costs. A provisional profit on the sale of #35m has been recognised in
these accounts pending finalisation of these amounts.



Approximately #94m of the AmerGen disposal proceeds were used to repay in full
the amounts outstanding under the Credit Facility. The remaining proceeds are
being used for general working capital purposes and to fund collateral.



Following the AmerGen sale, the temporary increase in the amount of the Credit
Facility to #275m, agreed with the Secretary of State on 27 November 2003, was
reduced back to the original amount of #200m. The temporary increase in the
amount of the Credit Facility was not utilised at any point during its period of
availability.



Agreement on Terms of Proposed Restructuring



On 1 October 2003 the Company announced that it had agreed the terms of the
Proposed Restructuring of the Group with certain of the Group's creditors and
the Secretary of State, subject to certain initial requirements for creditor
approvals and sign ups being obtained by 31 October 2003. On 31 October 2003,
the Company confirmed that these requirements had been satisfied.



Amendments to the Terms of the Company's Bonds and New Standstill Arrangements



On 19 December 2003 holders of each series of the Company's bonds approved
amendments to the trust deed constituting the bonds to facilitate the
implementation of the Proposed Restructuring and to amend the standstill
arrangements under the trust deed on terms consistent with the agreement reached
with other creditors on 1 October 2003 (the 'Creditors Restructuring
Agreement'). Following formal amendment of the trust deed, a new standstill
agreement has been entered into with creditors in accordance with the Creditor
Restructuring Agreement.



Business Developments



Major Outages



There have been unplanned outages at Heysham 1 when both reactors were shut down
on 28 October 2003. Both units commenced their return to service on 14
February. These outages were due to a cast iron pipework failure in the
seawater cooling system within the turbine hall. The Company carried out
inspections and decided it was necessary to replace a significant amount of cast
iron pipework at Heysham 1. Where similar deficiencies exist at other stations,
plans are being formulated for further cast iron pipework replacement. The
consequential remedial action is expectedto be undertaken in a planned manner
and the details will be reported at the time of the Company's preliminary
results.



The statutory outage at Sizewell B was extended by approximately twelve days due
to further inspections following the discovery of an unusual indication from
ultrasonic inspection of two welds in the turbine steam system. This issue was
resolved and the plant returned to service on 15 November 2003.



In aggregate, these recent outages resulted in lost generation of around 2.1 TWh
in the period which was equivalent to some #50m of lost profit contribution
inclusive of imbalance costs. Having taken account of these outages, other
unplanned outages in the year to date and remaining allowances for unplanned
outages, in December 2003 the Company announced the reduction in its full year
output forecast to around 65.5 TWh, from the previously forecast level of around
67.0 TWh.



Bruce Power Disposal



Under the terms of a trust agreement (the 'Trust Agreement') entered into on 14
February 2004 in connection with the disposal of the Company's 82.4% interest in
Bruce Power, additional consideration is payable to British Energy contingent
upon the restart of two of the four Bruce A units.



British Energy is seeking the payment of additional consideration under the
Trust Agreement on the basis that Bruce A Unit 4 was restarted in October 2003
and Unit 3 was restarted in January 2004. The Company is in discussion with the
Ontario Provincial Government which has indicated that it considers that the
units may have restarted, for the purposes of the Trust Agreement, at later
dates. None of the potential additional consideration has been recognised in
the financial statements of the quarter because there are remaining
uncertainties regarding its realisation and the amounts recoverable will be
significantly lower than the maximum C$100m. Note 12 to the Financial
Statements provides a fuller discussion.



On 12 February 2004 British Energy received a notice of warranty claims from the
consortium which purchased the Group's 82.4% interest in Bruce Power alleging
breach of certain warranties and representations relating to tax and to the
condition of certain plant at the Bruce power station. Further details are
provided in the 'Contingent Liabilities' section below.



Board Affairs



On 8 December 2003, the Company appointed Martin Gatto to the Board as Interim
Finance Director, as a temporary replacement for Keith Lough who resigned his
directorship on that date.



On 9 February 2004, the Company announced that John Delucca had been appointed
as an Independent Non-Executive Director of the Company with immediate effect.



The Board has undertaken an evaluation of its performance as recommended in the
Higgs Report and is working to be compliant with the revised Combined Code as
issued by the Financial Reporting Council.



Performance Improvements



On 22 August 2003 the Company announced that it had appointed a consortium of
partners led by Ove Arup and Partners International Limited. The role of the
consortium is to develop and assist with the rapid deployment of a number of
programmes to improve the operational reliability of the Group's nuclear plants.
Having considered the consortium's initial recommendations, the Company is now
focusing on finalising the scope of work and developing a detailed
implementation plan. The Company will give a further update on the progress of
these programmes at the time of our next Preliminary Results.



OTHER FACTORS AFFECTING RESULTS OF OPERATIONS



The results of operations are principally affected by changes in plant output,
electricity prices and operating costs. Each of these factors is discussed
below.



Plant Output



Nuclear output was 14.7 TWh (a 70% load factor) for the three-month period and
48.0 TWh (a 76% load factor) for the nine-month period. The nuclear output for
the equivalent periods in 2002 was 15.6 TWh (a 74% load factor) and 45.9 TWh (a
73% load factor) respectively.



Nuclear output for the three-month period and nine-month period was lower than
expected primarily due to the unplanned outages at Sizewell B and Heysham 1
which accounted for 2.1 TWh of lost output.



Output from the coal-fired power station at Eggborough was 2.6 TWh during the
three-month period and 4.7 TWh for the nine-month period. For the equivalent
periods in the previous year, the output was 2.4 TWh and 3.8 TWh respectively.
As Eggborough is operated primarily as a flexible mid-merit plant, its output
level is influenced by market prices, the Company's contracted trading position
and the extent to which it is operated as cover for unplanned outages.



Electricity Prices



By December 2003, the market price for annual forward baseload contracts had
increased by some 25% over those prevailing in March 2003, such that power for
delivery from April 2004 was trading at between #21/MWh and #22/MWh in December
2003. In the Company's view, the rise in price reflects, among other matters,
underlying increases in fossil fuel prices, a reduction in available plant
capacity in the UK market and the market's view of the likely impact of the
European Union's emission trading scheme which is due to commence on 1 January
2005. The increase in forward market prices referred to above has only been of
limited benefit to the Company because of its largely hedged contract portfolio.



British Energy's achieved selling price (which is calculated by dividing UK
turnover, net of energy supply costs and miscellaneous income, by total output
during the period) was #17.6/MWh for the three-month period and #16.4/MWh for
the nine-month period. The higher prices achieved in this quarter reflect
market price seasonality, as lower prices generally prevail in the Summer (April
- September) when demand is lower than in the Winter (October - March).



Operating Costs



Operating costs after exceptional items were #357m for the three-month period
and #1,067m for the nine-month period. These are discussed more fully later in
this report in the 'Results of Operations' section.



Exceptional Operating and Financing Items



The financial results of both the three-month period and the nine-month period
were affected by a number of exceptional operating and financing items. The
table below summarises the impact of exceptional operating and financing items
(before tax).


Three months Nine
ended 31
December 2003 months ended
31 December
2003
#m #m
Restructuring costs 3 40
UK decommissioning fund credit - (13)
Exceptional items included within operating costs 3 27

UK decommissioning fund credit (21) (47)
US decommissioning fund credit (8) (22)
Interest rate swaps provision credit (2) (5)
Exceptional items included within financing costs (31) (74)

Total net exceptional credits (28) (47)



Exceptional operating and financing items are discussed more fully in Notes 3
and 4 to the Financial Statements.



RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED 31 DECEMBER 2003 AND FOR THE
NINE MONTHS ENDED 31 DECEMBER 2003.



Group Performance



The operating results after exceptional operating items were an operating profit
of #12m for the three-month period and a loss of #21m for the nine-month period.



The loss on ordinary activities before taxation was #10m for the three-month
period and #81m for the nine-month period.



The discussion below will focus on the results of continuing activities for the
three-month period and the nine-month period. Certain comparative figures
extracted from the results of the six-month period ended 30 September 2003 (the
'six-month period') are also set out below to assist with discussion of
operating trends.



Turnover



Turnover was #369m in the three-month period and #1,046m in thenine-month
period, and is analysed as follows


Three months Six Nine
ended 31
December months months ended
2003 ended 30 31 December
September 2003
2003
#m #m #m
Direct supply sales 209 340 549
Wholesale generation sales 152 323 475
Miscellaneous income 8 14 22
369 677 1,046



The Direct supply sales includes energy supply costs recovered from customers.



Direct Supply Sales



At 31 December 2003, the Direct Supply Business had sales contracts in place,
which taken together with offtake volume achieved in the nine-month period were
expected to achieve an offtake volume of 29.3 TWh for the twelve-month period to
31 March 2004. Over the nine-month period the Company has increased the Direct
Supply Business sales, a consequence of which is to moderate the requirement for
collateral required to support wholesale generation sales. The business had
over 1,300 customers and served over 6,000 business sites. The 2003/04
contracted position at 31 December 2003 prospectively represents increases of
31% in volume over that achieved in the previous financial year. The Direct
Supply Business continues to be highly rated for its customer service, having
been ranked first for the eighteenth consecutive time in the quarterly survey of
industrial customers carried out by the Energy Information Centre.



Wholesale Generation Sales



The level of wholesale generation sales for the quarter reflects the changing
mix of sales being contracted by the Company. The #152m of wholesale generation
sales in the quarter represented 42% of turnover excluding miscellaneous income
compared to 49% in the six-month period.



Operating Costs



Total operating costs after exceptional items were #357m in the three-month
period and #1,067m in the nine-month period, and are further analysed as
follows:


Three months Six Nine
ended 31
December months ended months ended
2003 30 September 31 December
2003 2003
#m #m #m
Continuing activities excluding exceptional items:
Fuel 109 184 293
Material and services 118 262 380
Staff costs 59 112 171
Depreciation 11 25 36
Energy supply costs 57 103 160
354 686 1,040
Continuing activities - exceptional items:
Materials and services 3 37 40
Amounts credited to non-operational assets - (13) (13)
3 24 27
Continuing activities - total costs:
Fuel 109 184 293
Materials and services 121 299 420
Staff costs 59 112 171
Depreciation 11 25 36
Energy supply costs 57 103 160
Amounts credited to non-operational assets - (13) (13)
Total operating costs 357 710 1,067



Fuel



Total fuel costs amounted to #109m in the three-month period and #293m for the
nine-month period. Nuclear fuel costs were #78m for the three-month period and
#233m for the nine-month period. The costs of coal consumed were #31m and #60m
in the respective periods.



The costs of nuclear fuel in the quarter were proportionally higher when
compared to the six-month period, principally reflecting the impact of station
output mix and the effects of higher electricity prices on the BNFL front-end
fuel contracts.



On 16 May 2003, the Company announced that it had exchanged the last of the
suite of contracts covering front-end and back-end fuel services required to
give effect to the non-binding heads of terms entered into with BNFL. The
front-end contracts became effective on 1 April 2003 but may be terminated if
the Proposed Restructuring is not completed. The revised back-end contracts are
conditional on completion of the Proposed Restructuring but payments are being
made as if the revised back-end contracts had become effective on 1 April 2003.



The financial statements for the reporting period have been drawn up on the
basis of the historic BNFL contracts in respect of back-end fuel costs, pending
satisfaction of the restructuring conditions set out in the revised contracts.
Consequently, a contingent asset of #259m has been accumulated, but not
recognised, in the accounts for the period ended 31 December 2003 in respect of
the difference in amountspayable between the revised contracts and the historic
contracts. The components of the contingent asset are analysed below.


#m #m

Analysis of Contingent Asset:

Principal amounts due to BNFL at 31 March 2003 under the historic contracts 113
Amounts accrued for 9 months to 31 December 2003 under the historic contracts 185
Less: Amounts payable for 9 months to 31 December 2003 under the revised contracts
- Amounts paid in period (32)
- Amounts accrued at period end (16)
Benefit of the revised back-end contracts within the nine-month period which will be
recognised upon the Proposed Restructuring
137
Finance charges accrued on principal amounts stoodstill 9
Contingent asset recorded at 31 December 2003 (see Note 12 to the Financial Statements) 259



The contingent asset will be recognised upon the Proposed Restructuring together
with other restructuring related adjustments.



Materials and Services



Materials and services costs comprise the operating expenses of our power
stations and support functions excluding fuel costs, staff costs and
depreciation. The costs during the three-month period were #118m and in the
nine-month period were #380m excluding exceptional restructuring costs.



Included in materials and services is capital investment expenditure of #13m in
the three-month period and #60m in the nine-month period that would previously
have been capitalised as fixed assets but were expensed as operating costs
following the fixed asset impairment review carried out in the year ended 31
March 2003.



The rate of costs incurred in the three-month period reduced in comparison with
the six-month period. This reduction was due mainly to the phasing of
Eggborough outage and capital expenditure which was incurred primarily during
the six-month period.



Exceptional charges amounting to #3m and #40m were incurred in the quarter and
period respectively in relation to advisory and other costs associated with the
Company's Proposed Restructuring.



Staff Costs



Staff costs were #59m in the three-month period and #171m during the nine-month
period.



Depreciation



Depreciation charges were #11m in the three-month period and #36m during the
nine-month period. The charges for depreciation were significantly affected by
the #3,738m write down of fixed assets at 31 March 2003 (see Note 7(ii) of the
Financial Statements for the three and nine months ended 31 December 2003).



Energy Supply Costs



Energy supply costs, which mainly comprisethe costs incurred for the use of the
distribution and transmission systems, recovered through turnover, were #57m in
the three-month period and were #160m in the nine-month period. This increase
reflects the growth in the Direct Supply Business since 31 March 2003 as
discussed above.



Non-operational Assets



There was an exceptional credit against non-operational assets in the nine-month
period of #13m, all of which arose in the first six months of the year. This
credit relates to the mark to market value adjustment of the UK decommissioning
fund and fully reverses the write down made in the year ended 31 March 2003.



Operating Profit/(Loss)



The operating results are analysed below:


Three months Six Nine months
ended 31 ended 31
December months ended December
2003 30 September 2003
2003
#m #m #m
Operating profit/(loss) before exceptional items 15 (9) 6
Exceptional items:
Restructuring costs (3) (37) (40)
UK Decommissioning Fund - 13 13
Total 12 (33) (21)



Share of Operating (Loss)/Profit of Discontinued Joint Venture



The Group's share of the operating result of AmerGen to the date of disposal was
a loss of #21m in the three-month period and a profit of #22m in the nine-month
period. The operating loss for the three-month period was primarily due to
problems being encountered during a planned outage at the Three Mile Island
power station, beginning in October 2003, which meant that the station did not
return to service until the end of December. Output from the three AmerGen
power stations totalled 3.5 TWh in the three-month period and 14.1 TWh in the
nine-month period. The Company's 50% share in AmerGen was sold to Exelon on 22
December 2003 as previously discussed above.



Financing Charges


Three months Six months Nine months
ended 31 ended 30 ended 31
December September December
2003 2003 2003
#m #m #m
Revalorisation of nuclear liabilities 47 116 163
Revalorisation of decommissioning fund (6) (16) (22)
Other revalorisation (1) (1) (2)
Total revalorisation 40 99 139
Net interest expense 29 25 54
Financing charges before exceptional items 69124 193

Exceptional interest (2) (3) (5)
Exceptional revalorisation (29) (40) (69)
Total financing charges 38 81 119



Revalorisation arises because nuclear liabilities are stated in the balance
sheet at current price levels, discounted at 3% per year real from the eventual
payment dates. The revalorisation charge is the adjustment that results from
restating these liabilities to take into account the effect of inflation in the
year, and to remove the effect of pro rata discount. Similarly, a
revalorisation credit arises in respect of the decommissioning fund which is
calculated by applying an actuarial assessment of the long-term investment
growth rate to fund contributions in order to determine the asset value to be
recorded in the balance sheet. The growth rate used in the calculations is
based on 3.5% per annum real.



The net revalorisation charge excluding exceptional items was #40m in the
three-month period and #139m in the nine-month period. The weighted average UK
inflation rate was 0.5% in the three-month period and 2.0% in the nine-month
period.



In the three-month and nine-month period there were exceptional interest credits
of #2m and #5m respectively in respect of interest rate swaps. In the
respective periods there were exceptional credits of #29m and #69m in respect of
revaluation of the decommissioning fund receivables. These are discussed more
fully in Note 4 to the Financial Statements.



Taxation



There was no taxation charge onordinary activities in either the three-month or
nine-month period ended 31 December 2003.



The tax credit for the three-month period was #7m in respect of a decrease in
the Group's liability for its share of AmerGen's taxable profits bringing the
total tax charge for the nine-month period to #1m.



No deferred tax asset has been recognised at 31 December 2003.



The tax paid in the nine-month period relates wholly to the Group's liabilities
for its share of AmerGen's taxable profits.



Loss on Ordinary Activities



As a result of the factors discussed above, there was a loss on ordinary
activities after taxation for the three-month period of #3m and #82m in the
nine-month period.



Loss per Share



There was a loss per share of 0.5p per share in the three-month period and a
loss per share of 13.6p per share in the nine-month period.



Capital Expenditure



During both the three-month period and the nine-month period, amounts that would
previously have been capitalised as fixed assets, totalling #13m and #60m
respectively, were expensed as operating costs following the fixed asset
impairment review carried out in the year ended 31 March 2003.



Research and Development



We support primarily scientific and engineering research activity directed
toward securing further improvements in the reliability, performance and safety
of our generating business and related activities. In the three-month and
nine-month periods our expenditure on research and development was #4m and #10m
respectively which are included within material and services costs.



LIQUIDITY AND CAPITAL RESOURCES



Restructuring Update



Following the sale of AmerGen, the Credit Facility was fully repaid and the
amount of the Credit Facility reduced back to #200m on 24 December 2003.
Further details of the Group's Proposed Restructuring are included in Note 1 to
the Financial Statements.



Cash Flow from Operating Activities



Thetable below sets out the key components of operating cash flow for the
nine-month period.


Nine months
ended 31
December 2003
#m
Operating loss including exceptional items (21)
Exceptional items 27
Operating profit excluding exceptional items 6
Depreciation 36
Non cash nuclear liabilities charged to operating costs 96
Nuclear liabilities discharged (45)
Movements in other provisions (2)
Exceptional items discharged (30)
Working capital excluding exceptional items (60)
Net cash flow from operating activities 1



The highlights in operating cash flow reflect the following:



* Payments to BNFL amounting to #32m (compared to #115m cash
payments in the nine months to 31 December 2002) based on the revised contracts
discussed above are included within the #45m movement. Also included in the
movement are payments to the UK decommissioning fund of #13m.



* The movement in working capital of #60m can be attributed to
movements in the balances at 31 December 2003 compared to 31 March 2003 as
follows:

Within debtors:

- trade debtors increased by #47m due to increased prices
and winter volume increases

- increase in prepayments of #34m mainly related to
movement in pension prepayment

- decrease in taxation and social security balance recorded
in debtors of #65m

- decrease in other debtors of #7m

Within creditors:

- increase in trade creditors of #10m mainly reflecting
increased energy purchases

- decrease in taxation and social security balance recorded
in creditors of #58m

- decrease in other creditors of #3m.



Returns on Investment and Servicing of Finance



The cash flow for returns on investment and servicing of finance comprises
interest paid and interest received and was an outflow of #55m in the nine-month
period due to the payment of interest on the loans and borrowings and other
amounts stoodstill under the Proposed Restructuring.



Disposals



Disposals yielded a cash inflow of #165m in the nine-month period. This
reflects the proceeds from the sale of AmerGen of approximately #154m, net of
costsassociated with the transaction. In addition, the Group received #9m in
relation to pension related cash retentions in respect of the disposal of our
interests in Bruce Power and #2m for the sale of the investment in Offshore Wind
Power Limited.



Management of Liquid Resources



The net cash outflow due to movements in financial investments and increases in
term deposits was #92m in the nine-month period. This reflects balances on the
term deposit accounts holding the collateral amounts rising from #246m at 31
March 2003 to #338m at 31 December 2003.



Capital Resources



At 31 December 2003, total debt of #883m comprised:



* A project finance loan of #475m secured on the assets of
Eggborough Power Limited ('EPL'), a subsidiary company that operates the
Eggborough coal-fired power station. Amounts owed by EPL are not guaranteed by
British Energy but British Energy guarantees the payment of amounts by British
Energy Power and Energy Trading Limited ('BEPET') to EPL under the Capacity and
Tolling Agreement ('CTA') between BEPET and EPL. The contractual amounts
payable by BEPET under the CTA are calculated so as to cover EPL's borrowing
requirements and operating costs. British Energy also provides a subordinated
loan facility to EPL. The final instalment of loan principal will be repaid in
2011. The loan currently bears interest at LIBOR plus 1.3%. It is proposed
that these arrangements will be restructured as part of the Proposed
Restructuring of the Group. For further details of the Proposed Restructuring
see Note 1 to the Financial Statements. At 31 December 2003 the effect of the
Group's interest rate contracts is to classify the borrowings as fixed rate.



* An aggregate principal amount of #408m sterling denominated
bonds due between 2003 and 2016. The bonds bear interest at a rate of between
5.9% and 6.2%. An aggregate principal amount of #110m matured in March 2003 but
payment has been stoodstill as part of the arrangements in our financial
restructuring.



There were no drawings under the Credit Facility at 31 December 2003 and the
conditions applying to the facility are more fully discussed in Note 1 to the
Financial Statements.



Future Liquidity



The Group had an available cash balance of #91m at 31 December 2003 along with
#338m of cash which had been deposited in collateral bank accounts for trading
purposes.



The Group's main source of liquidity is its operating businesses. Cash
generation by the operating businesses is dependent upon the reliability of the
Company's power stations to produce electricity, the selling price achieved for
electricity, operational risk and capital investment expenditure and maintenance
requirements.



The Group lost its investment grade rating in September 2002. British Energy
will seek a new credit rating upon the issuance of new bonds as part of the
Proposed Restructuring of the Group. The loss of investment grade rating has
meant that the Group now has to provide significant levels of collateral to
counter-parties in order to maintain trading arrangements, thereby substantially
reducing the levels of cash resources available to the Group. Given the
financial circumstances of the Group, certain contracts may be capable of being
terminated. Such termination may result in termination payments being payable
as well as having an adverse effect on our cash flows.



The Credit Facility was undrawn at 31 December 2003 and 24 February 2004, and is
available to the Company for working capital purposes. The Credit Facility will
mature on the earliest of the date required by the Commission, 30 September
2004, and the date on which the Proposed Restructuring becomes effective, as
more particularly described in Note 1 to the Financial Statements.



The Company faced short term pressures on liquidity during the quarter resulting
from the combined effect of seasonality, the unplanned outages at Sizewell B and
Heysham 1 and the increased levels of collateral and costs of unplanned outages
brought about by the increased level of volatility in electricity prices.



The Board remains of the opinion that the working capital available to the Group
is not sufficient for the present requirements of the Group. The Company is
taking steps with a view to improving this situation (further detail is provided
in Note 1 of the Financial Statements). The receipt of the proceeds from the
disposal of AmerGen significantly increased the Group's financial flexibility.
Over the longer term, the Board is exploring initiatives to reduce the demand
for trading collateral and to achieve sufficient liquid resources to implement
the Proposed Restructuring.



The Proposed Restructuring and, therefore, the working capital available to the
Group, remain subject to a large number of significant uncertainties and
important conditions. These include receipt by the Secretary of Stateof a
satisfactory notification from the Commission that, insofar as the proposals
involve the grant of State Aid by the UK Government, such aid is compatible with
the common market ('EC Approval'). The Secretary of State expects to receive
this notification by mid-2004. Furthermore, the Secretary of State is entitled
not to proceed with the Proposed 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.



If the conditions to the Proposed Restructuring are not fulfilled, or if the
Company's cash generating initiatives are not achieved, in each case, within the
time scales envisaged or required, or if there is a material deterioration in
the Group's cash flow position, performance or outlook, or if the Credit
Facility ceases to be available or if the standstill arrangements which the
Group has entered into with certain of its creditors are terminated, British
Energy may be unable to meet its financial obligations as they fall due and
consequently the Company may have to take appropriate insolvency proceedings, in
which case the distributions to unsecured creditors may represent only a small
fraction of their unsecured liabilities and there is unlikely to be any return
to shareholders.



POST BALANCE SHEET EVENTS



On 4 February 2004, the Company announced that it had settled a long-standing
dispute with Siemens relating to work done in 1996 by the former Parsons
business. Under the terms of the settlement, Siemens has agreed to pay the
Company #18.3m. The settlement includes a commitment by the Company and Siemens
to develop a mutually beneficial commercial relationship under a long term
supply agreement.



CONTINGENT LIABILITIES



On 12 February 2004 British Energy received a notice of warranty claims from the
consortium which purchased the Group's 82.4% interest in BrucePower alleging
breach of certain warranties and representations relating to tax and to the
condition of certain plant at the Bruce power station.



The claim relating to the condition of the plant is based upon alleged erosion
of some of the steam generator support plates, through which boiler tubes pass,
which it is alleged resulted in an extended outage of one unit at the plant to
carry out repair works and loss of revenues and costs of approximately C$64.5m.
The consortium also claimsthat the alleged erosion may reduce the operating
life of the unit and/or result in further repairs involving further losses.
British Energy has received no supporting evidence and has insufficient
information to evaluate the claim fully. However, the Company expects to defend
the claim.



The principal tax claim relates to the treatment of expenditure at the Bruce
plant during the period of the Company's ownership which is currently being
considered by the Canadian tax authorities. The treatment proposed by British
Energy could result in a rebate of a material amount of tax to the Group which
has not been recognised in the Financial Statements of the period. The
consortium claims that allowance of the expenditure for that period would cause
it to lose future deductions. British Energy expects to defend the claim and,
on the basis of advice received, the Company is confident that the amount of the
claim should not, in any event, materially exceed the amount of the rebate, and
that the claim should have no material cash flow impact on the Group.



Under the agreement with the consortium C$20m is retained in trust to meet any
representation and warranty claims, and this may be retained pending agreement
or determination of the claims.



Further contingent liabilities of the Group are described in Note 13 to the
Financial Statements for the period.



DIVIDEND POLICY



The Board intends to distribute to shareholders as much of the Company's
available cash flow as prudently possible, consistent with the long-term
development of the business. However, under the terms of the Proposed
Restructuring, there are certain restrictions on the Board's ability to pay
dividends, as follows:



* British Energy is required to fund a cash reserve out of the
Company's post-debt service cash flow in order to support the Group's collateral
and liquidity requirements post-restructuring. The initial target amount for
the cash reserve is #490m plus the amount by which cash employed as collateral
exceeds #200m (the 'Target Amount'). It is expected that, when the Proposed
Restructuring is completed, the level of the cash reserves will be below the
Target Amount and therefore there willbe no distributions to shareholders until
such times as the cash reserve is at the required level. As a result of the
requirements to fund the cash reserves, the Board does not expect to pay a
dividend in respect of the financial years ending 31 March 2004 and 2005;



* the terms of the Nuclear Liabilities Agreements to be entered
into as part of the Proposed Restructuring also require that once the cash
reserve is funded to the Target Amount, British Energy must make CashSweep
Payments to the Nuclear Liabilities Fund ('NLF'). The NLF Cash Sweep Payment is
initially defined as 65% of the movement in cash, cash equivalents and other
liquid assets during the year after adjusting for, among other things, certain
payments made to the NLF or dividends paid in the year. The requirement to make
the NLF Cash Sweep Payment will greatly reduce the amount of cash that would
otherwise be available for distribution to shareholders;



* the terms of the new bonds to be issued as part of the
Proposed Restructuring contain certain covenants, including a restriction that
allows British Energy to pay a dividend only if no event of default has
occurred; and



* the Company must have distributable reserves.



ITEM 2 : QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The following discussions about the British Energy risk management activities
include 'forward-looking' statements that involve risk and uncertainties.
Actual results could differ materially from those projected in the
forward-looking statements.



The following discussion relates to the financial instruments, derivative
instruments and derivative commodity instruments held by British Energy at 31
December 2003, which are potentially sensitive to changes in interest rates,
foreign exchange rates, commodity prices and equity markets. The Group uses
derivative instruments to hedge the primary market exposures associated with the
underlying assets, liabilities and committed transactions. None of the
instruments entered into is leveraged or held for speculative purposes.



FINANCIAL INSTRUMENTS AND RISK MANAGEMENT



Overview



The main financial risks faced are trading risks in England and Wales in respect
of both price and volume output on the sale of our electricity. There is also
an exposure to risks associated with fluctuations in the equity markets through
the Decommissioning Fund and Pension Schemes. Policies have been instituted for
managing each of these risks, which have been approved by the Board of
Directors. Each of these risks is discussed in more detail below.



Electricity trading risks are managed by the Power and Energy Trading Division.
The Power and Energy Trading Division operate within policies and procedures
which are approved by the Board and monitored by a sub-committee of the
Executive Committee.



Non-trading risks (i.e. cash resources, debt finance and financial risks) are
managed by the central treasury function (the 'Treasury Department'). The
Treasury Department operates within policies and procedures approved by the
Board. The Treasury Department uses appropriate and available instruments,
within specified limits, to manage financial risk but is not permitted to take
speculative, open positions. Both the Treasury Department and the Power and
Energy Trading Division are subject to regular scrutiny from our internal
auditors.



Interest Rate Risk Management



The market value of debt varies with fluctuations in prevailing interest rates
in the United Kingdom.



Eggborough related derivative agreements (nominal amount of #398m as at 31 March
2003) have been amended post 31 March 2003 as part of the Proposed Restructuring
process. The effect has been to fix future interest payments under the swaps
from October 2004 onwards.



At 31 December 2003 the total of investments in liquid funds and cash at bank
amounted to #429m, and had maturity dates due within one year. Cash not
immediately required for business purposes is invested in fixed-rate term
deposits and money market funds. At 31 December 2003 the term deposits and
money market funds not used to fund collateral were due to mature or were
available within one day and earned interest at an average rate of 3.5%. Term
deposits, money market funds and bank balances at 31 December 2003 include #338m
of cash which has been deposited in collateral bank accounts and earned interest
at an average rate of 2.8%. Availability of this cash is, therefore, restricted
over the periods of the collateralised positions.



As the deposit terms are short term, the carrying value at 31 December 2003
approximates to the fair market value.



Foreign Exchange Risk Management



There are potential future foreign currency receivables in respect of amounts
outstanding from the sale of Bruce Power and AmerGen. When these cash flows
become more certain in the future the Group will evaluate currency hedging
opportunities, balancing the cost and availability of entering into such
transactions against the underlying currency risk.



At 31 December 2003 there were no foreign exchange contracts in place.



In addition, at 31 March 2003, there were deferred losses of #2m accounted for
as part of stock which arose on the rollover of maturing forward contracts used
for hedging the future purchase of nuclear fuel prior to and including the year
ended 31 March 2003. See Note 20 to our consolidated Financial Statements as at
31 March 2003.



Electricity Trading Risk Management



Trading activities relate principally to supporting our generation business.
The trading operations, therefore, act principally as wholesale marketers rather
than as pure financial traders, with the principal objective of increasing the
return on assets while hedging the market risk associated with the output of the
plants.



Under NETA in England and Wales any mismatch between actual metered generation
(or demand) and the notified contract position is settled through the balancing
mechanism at generally unfavourable prices. British Energy aims to sell all
planned nuclear output forward and tominimise exposure to the balancing
mechanism.



The risks in the wholesale market are managed through a contracting strategy
that builds a portfolio of forward contracts with a variety of terms.



Eggborough provides a flexible generation capability which fulfils three
purposes designed to enhance our profitability. Firstly, it provides a means
for compensating for unplanned lost output from nuclear units at short notice;
secondly it provides the capability to profile the generation shape to meet the
requirements of both wholesale and Direct Supply Business customers; and
thirdly, it provides a flexible capability that is offered to the system
operator via the balancing mechanism.



Output from the two stations in Scotland will continue to be sold under the
terms of the Nuclear Energy Agreement to Scottish Power and Scottish and
Southern Energy until April 2006, or the introduction of British Electricity
Transmission and Trading Arrangements, whichever is earlier.



Following a review of the management structure of BEPET, an independent Risk
Measurement and Controls Manager is to be appointed, reporting directly to the
Group Treasurer.



British Energy's policy is to manage credit exposure to trading and financial
counterparties within clearly defined limits. Electricity trading activities
are strictly monitored by a sub-committee of the Executive Committee and
controlled through delegated authorities and procedures, which include specific
criteria for the management of counterparty credit exposures.



Equity Risk Management



The UK decommissioning fund was established to provide for the eventual
decommissioning of the UK nuclear power stations. Cash contributions are made
on a quarterly basis to a payment profile set out in a contract between us and
the UK decommissioning fund and are invested by the trustees of the UK
decommissioning fund in UK marketable fixed income debt, equity securities and
property. British Energy is ultimately responsible for contributions to the UK
decommissioning fund. Therefore, the level of future contributions, which are
reviewed every five years in conjunction with the review of ultimate
decommissioning costs, depend partly on the estimatedlong-term investment
performance of the equity and debt instruments in which the contributions are
invested and returns on investments in property. Income from dividends and
other returns on the underlying investments are retained by the UK
decommissioning fund and then invested in debt and equity securities.



The UK decommissioning fund included debt and equity securities with market
values of #45m and #384m respectively at 31 December 2003.



The balance on the UK decommissioning fund

LONDON (AFX) - British Energy PLC, the troubled nuclear power generator, has
admitted its restructuring proposals are still subject to "significant
uncertainties".
The plans remain contingent on European regulators confirming that a 275 mln
stg loan granted to the company by the UK government does not contravene State
Aid regulations. A decision is expected in the summer.
"Whilst a decision by the European Commission on restructuring is pending,
we are focusing on improving British Energy's operational reliability and
financial capability," said chairman Adrian Montague.
The group reported a third quarter pretax loss of 10 mln stg for the three
months to end December. However, it generated an operating profit of 12 mlnstg
over the same period.
For the nine month period, it reported a pretax loss of 81 mln stg and an
operating loss of 21 mln stg.
Total UK output was 17.3 terrawatt hours (TWh) in the quarter, down 4 pct,
and 52.7 TWh for the nine month period, up 6 pct.
Net debt was reduced by 167 mln stg to 454 mln stg in the quarter, primarily
as a result of the net proceeds from the 277 mln usd sale of the group's AmerGen
business.
The group confirmed it does not expect to pay a dividendin either 2004 or
2005.
The shares closed at 7.75 pence, down 0.25.
matt.scuffham@afxnews.com
mps/bam

RNS Number:8806V
British Energy PLC
26 February 2004

26 February 2004

British Energy plc
Third Quarter Results ended 31 December 2003

The results presentation for the third quarter results ended 31 December 2003
is now available at:

http://production.investis.com/britishenergyplc/bgy_presentations/q3_03.pdf
http://www.british-energy.com/investors/presentations/index.html or

For further information please contact:

Paul Heward British Energy 01355 262201
Andrew Dowler Financial Dynamics 020 7831 3113




This information is provided by RNS
The company news service from the London Stock Exchange
END

Positive Candidate (Short term) - Mar 1, 2004
Has risen 89% since the bottom on 17 Dec 2003 at 4.03. Is within a rising trend and continued advance within the current trend is indicated. On reactions back, there is support against the floor of the trend channel. The stock has support at p 6.20 and resistance at p 10.20. High risk with a difference between the lowest and the highest price of an average month of 132%.

Positive Candidate (Medium term) - Mar 1, 2004
Has fallen 92% since the peak on 9 Aug 2002 at 95.00. Is within an approximate horizontal trend, which indicates further development in the same direction. Has given positive signal from a rectangle formation by a break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The stock has marginally broken up through the resistance at p 7.00. An established break predicts a further rise. High risk with a difference between the lowest and the highest price of an average month of 132%.

Positive Candidate (Long term) - Mar 1, 2004
Has fallen 99% since the peak on 20 Jan 1999 at 730. Is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. It, however, gave a positive signal from a rectangle formation at the break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The volume balance is positive and strengthens the stock further in the short term. The stock has support at p 3.50 and resistance at p 255. High risk with a difference between the lowest and the highest price of an average month of 132%.

In the top five most bought stock with Comdirect today:



Buys Sells
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British Energy Lloyds TSB Group
2nd March, 2004

Looking at the 5 yr chart I can see a 'cup' forming.

Having been told to dyor, as this one caught my eye I started to read.... and read ...then gave up! To much knowledge for a novice. Sorry but can you tell me what a 'cup' is and is this then a 'long term buy' or one to miss!

Hi, it's a short/medium term buy. The downside is these go back to 4-5 pence levels and the upside is that these could hit 1.50 pence or more.

(Just the header post on this thread should give you an idea of what is happening: it is Evil Knievil's update released today).


Hope Xmortal can elaborate what a cup is for us when he gets the opportunity.

Investtech Analysis:

Positive Candidate (Short term) - Mar 2, 2004
Has risen 99% since the bottom on 17 Dec 2003 at 4.03. Is within a rising trend, which indicates a continued growth. The stock has support at p 6.20 and resistance at p 10.20. High risk with a difference between the lowest and the highest price of an average month of 131%.

Positive Candidate (Medium term) - Mar 2, 2004
Has fallen 91% since the peak on 12 Aug 2002 at 89.75. Is within an approximate horizontal trend, which indicates further development in the same direction. Has given positive signal from a rectangle formation by a break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The stock has broken up through the resistance at p 7.00. This predicts a further rise. In case of negative reactions, there will now be support at p 7.00. High risk with a difference between the lowest and the highest price of an average month of 131%.

Positive Candidate (Long term) - Mar 2, 2004
Has fallen 99% since the peak on 20 Jan 1999 at 730. Is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. It, however, gave a positive signal from a rectangle formation at the break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The volume balance is positive and strengthens the stock further in the short term. The stock has support at p 3.50 and resistance at p 255. The average difference between the lowest and highest price of a month is 131%. The risk is therefore high.

Doesn't Evil need lots of others to buy so he can close his shorts, or is it just me being cynical?

He closed his shorts long time ago and now he's long with 5 million shares.

The MACD signal is going to become positive today possibly as the blue line crosses the green line.

Some good buying thus far: Price 7.70-7.95 pence, tight spread.

200,000 Automatic Trade buy at 7.95 pence.

First AT trade today, need more AT buys to provide stimulus to the price.

Price 7.75-8.00 pence. More AT buys may be on the horizon at 8 pence.

The 2 trades for 1,500,000 each are a rollover which bodes very well for BGY as they obviously think it has a lot higher to climb.

A rollover trade is executed when someone has bought on, say, a T10 (10 working days credit) and then wants to extend that i.e. delay paying for the shares. To do that they arrange to "sell" and "buy back" the shares for a small premium and then they have another, say, 10 working days to cough up for them - it is done to extend the credit in the hope of being able to sell at a profit before the settlement date. You will note the small price differential between the two trades of 1.5 million of 0.04p which equates to a charge of 600 for the privelage of doing the rollover.

183,000 AT buy at 8 pence followed by a 250,000 ordinary buy at 8 pence.

Price 7.85-8.10 pence.

7.9-8.0 pence, lots of AT buys gone through at 8 pence.

Price 8.0-8.15 pence. The 250,000 and 140,000 at 8 pence are buys, appeared in the sell column.

The blue line has nearly fully crossed the green line on the MACD indicator. Bodes well.

Online spread 8.0-8.15 pence. A 0.1 pence premium on the bid all morning today.

Getting interesting now, 2*250,000 buys reported at 8.1 pence. Lots of AT buys coming through.

Price stable at 7.90-8.09 pence. Trying to push through pass 8 pence.

hiya suehelen, i bet your`re gutted that black rock didnt go anywhere after you paid 2.25 and can only get 1.75, a 500 loss in two days, ouch!!!! i see you have found BGY to ramp now!!

I am and will continue to hold BLR for the medium/long term. It will rise substantially in the coming months. I am allowed to hold more than one stock and spread my eggs hence I have purchased some in BGY as well.

If you would like to know then I am holding BGY, AFG, BLR, MDW at this moment in time.

I will let you work out the profits as you're so keen on doing my sums for me.

Order book is thin this afternoon hence the slight pullback on the bid price. Offer price has remained around 8 pence with the price now at 7.76-7.99 pence.

sue helen did you sell your cms shares as well after ramping them or do you still hold them?

Hi windys, I did state on the thread when I had sold them which was few months ago. I did not ramp otheriwse I would have sold them at around 20 pence but the expected news which I was expecting did come through as you would agree but nonetheless there hasn't been any news on the TDI front hence I sold out in January. This was also because there have been so many better plays out there in the last couple of months.

I am still interested in CWV and will re-assess my position around the time when the results are to be released.

You have to be fair, I did mention them first at 6.5 pence to buy.

Best Wishes.

Price approaching close at 7.81-8.0 pence. The blue line looks like going over the green line on the MACD indicator tomorrow morning which is a strong buy sign.

110,000 buy reported at 8 pence after close.

Price adjusted to 7.9-8.0 pence.

Investtech Analysis:

Positive Candidate (Short term) - Mar 3, 2004
Has risen 99% since the bottom on 17 Dec 2003 at 4.03. Shows a strong development within a rising trend channel. A further positive development is indicated, and there is support against the floor of the trend channel. The stock has support at p 6.20 and resistance at p 10.20. High risk with a difference between the lowest and the highest price of an average month of 130%.

Positive Candidate (Medium term) - Mar 3, 2004
Has fallen 91% since the peak on 30 Aug 2002 at 84.50. Is within an approximate horizontal trend, which indicates further development in the same direction. Has given positive signal from a rectangle formation by a break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The stock has broken up through the resistance at p 6.80. This predicts a further rise. High risk with a difference between the lowest and the highest price of an average month of 130%.

Positive Candidate (Long term) - Mar 3, 2004
Has fallen 99% since the peak on 20 Jan 1999 at 730. Is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. It, however, gave a positive signal from a rectangle formation at the break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. Positive volume balance, i.e. high volume in days of rising prices and low volume in days of falling prices, strengthens the stock further in the short term. The stock has support at p 3.50 and resistance at p 255. High risk.

Press info today: The Independent Newspaper

The Independent

Further news:

*British Energy (LSE: BGY.L - news) debt rumour generates new interest.


http://uk.biz.yahoo.com/040303/237/enj2i.html

British Energy debt rumour sparks new interest
By Michael Jivkov
03 March 2004


Ever since the US hedge fund Appaloosa bought into British Energy, and then sold its stake soon afterwards for a quick profit, the electricity provider's stock has turned into something of a favourite for traders to gossip about and punt.

The latest story to do the rounds suggested that BE is in a position to redeem a 110m bond which matures this month. The bond accounts for 12 per cent of the group's total debt pile and some argued yesterday that it could result in current shareholders getting a bigger slug of the equity in the post-restructuring BE. According to the logic, if creditors are suddenly owed less money by BE then they should get a smaller part of the post-restructuring company, leaving more for BE's current equity holders.

The story sent BE 0.4p higher to 8p but a spokesperson for the company poured cold water on the theory. He indicated that the electricity provider has no plans to redeem any of its debt and said that the standstill agreement it has reached with its creditors is very much in place. Under the deal, creditors will get 97.5 per cent of BE shares after the group's restructuring has been approved by European regulators and completed. Existing equity holders will get 2.5 per cent.

Why won't the company redeem its debt, which could potentially give current shareholders a boost? Well, it seems the group does not have the capital for such a transaction, even if it is generating more cash than twelve months ago thanks to rising electricity prices.

http://news.independent.co.uk/business/market_report/story.jsp?story=497242

Pre-market buy for 860,000 shares at 8.02 pence reported.

7.55-7.75 - 200,000 buy reported at 7.72 pence.

SueHelen

I know that there is sometimes little rationale, (to us small investors), behind the way shares are priced by the MMs, but I see today that buys outnumber sells by 8:1, any idea why this might be the case for BE?

Regards

PTH

Hi there,

It is probably because there are not any Automatic trades (AT) going through. The AT trades are those that are placed on the order book and this morning it seems that there is not much on the order book hence the price is static for the time being.

This is a SETS traded stock so the Market Makers have little control over these.

RNS Number:1324W
British Energy PLC
4 March 2004



BRITISH ENERGY plc - OUTPUT STATEMENT

A summary of net output from British Energy's power stations in February is
given in the table below, together with comparative data for the previous
financial year:-


2002/03 2003/04

February Year to Date February Year toDate

Output Load Output Load Output Load Output Load
(TWh) Factor (TWh) Factor (TWh) Factor (TWh) Factor
(%) (%) (%) (%)

UK 5.79 90 58.17 76 5.34 80 59.05 77
Nuclear

UK 0.53 41 5.23 34 1.15 85 6.94 45
Other

Planned Outages

* A refuelling outage was completed on one reactor at Hartlepool and another
carried out on one reactor at Dungeness B
* Low load refuelling was carried out on one reactor each at Hinkley Point B
and Hunterston B.

Unplanned Outages

* Both reactors at Heysham 1 returned to service following the seawater
cooling pipefailure outage. We believe that the outage on both units is
likely to continue into mid-February 2004 as previously
* One reactor at Torness was shutdown as a precautionary measure for an
exchange of a potentially defective fuel assembly before returning to service
late February.


Contact:

Andrew Dowler 020 7831 3113 (Media Enquiries)
Paul Heward 013552 62201 (Investor Relations)

Find thisNews Release on our web-site: www.british-energy.com




This information is provided by RNS
The company news service from the London Stock Exchange

END

275,000 BUY at 7.75 pence.

A CUP = As it name suggest if the share trend forms a cup shape figure. If u take a look at the BGY chart from mid 2001 it has been in decline; that is right wall of the cup. From mid August 2002 up to mid Jan this year the bottom of the cup was formed. From mid Jan to now the other or left wall of the cup seems to be forming. According to points and figures this is a quite strong reversal signal. To be sure,best to wait BGY refinancing is sorted. I recommend you to visit www.smartmoney.com and take a look at the map sectors. It is a good indicative of how sectors are progressing. Although it is for the american market but relevant to the UK. Sue will u visit this nad tell me what u think?

Thanks xmortal for that. Will have sometime at the weekend and will check it out then.

Lighter volumes today though a 500,000 AT buy was reported at 7.75 pence in the afternoon.

RNS Number:1395W
British Energy PLC
04 March 2004


BRITISH ENERGY plc - OUTPUT STATEMENT

The statement below replaces the announcement today made at 11:00 (RNS 1324W)
which contained an error relating to timing of the return of service of thereactors
at Heysham 1. A corrected version is given below.

A summary of net output from British Energy's power stations in February is
given in the table below, together with comparative data for the previous
financial year.2002/03 2003/04

February Year to DateFebruary
Year to Date
Output Load Output Load Output Load
Output Load
(TWh) Factor (%) (TWh) Factor (%) (TWh)
Factor(TWh) Factor

(%) (%)
UK Nuclear 5.79 90 58.17 76 5.34 80
59.05 77UK Other 0.53 41 5.23 34 1.15
85 6.94 45




Planned Outages

* A refuelling outage was completed on one reactor at Hartlepool and another
carried out on one reactor at Dungeness B
* Low load refuelling was carried out on one reactor each at Hinkley Point B
and Hunterston B.

Unplanned Outages

* Both reactors at Heysham 1 returned to service following the seawater
cooling pipe failure outage
* Onereactor at Torness was shutdown as a precautionary measure for an
exchange of a potentially defective fuel assembly before returning to
service late February.








Contact:
Andrew Dowler 020 7831 3113(Media Enquiries)
Paul Heward 013552 62201 (Investor Relations)

Find this News Release on our web-site: www.british-energy.com


This information is provided by RNS
The company news service from the London Stock Exchange
END

(Repeating for technical reasons)
LONDON (AFX) - British Energy PLC said nuclear output in February was 5.34
TWh, down from 5.79 TWh a year earlier. The load factor for February was 80 pct,
against 90 pct last year.
The company saida refuelling outage was completed on one reactor at
Hartlepool and another carried out on one reactor at Dungeness B. Low load
refuelling was also carried out on one reactor, each at Hinkley Point B and
Hunterston B as part of the company's planned outages.
It added that both reactors at Heysham 1 returned to service following an
unplanned seawater cooling pipe failure outage.
In addition, one reactor at Torness was shutdown as a precautionary measure
for an exchange of a potentially defective fuel assembly before returning to
service late February.
bam/ak

RNS Number:1669W
British Energy PLC
04 March 2004

A Price Monitoring Extension has been activated in this security.

END

RNS Number:1679W
British Energy PLC
04 March 2004

A second Price Monitoring Extension has been activated in this security.

END

Sue Helen

Sorry to be dense but what is a 'Price Monitoring Extension?'

Regards

PTH

What is a price-monitoring extension. I often see this as part of an RNS news story?


Price-monitoring extensions (PME's) are an inbuilt function of the Stock Exchange's order book and are designed to prevent price volatility in the opening and closing auctions by suspending automatic trading in a security for a period of time if its price moves sharply in either direction.

Mmeber firms are still allowed to submit orders to and delete orders from the order book should such a suspension take place.

In the opening auction, the PME (5 minutes plus a random 30-second end period) occurs when a price is 10% or more away from the last automated order book trade. The random end period is designed to prevent market manipulation by traders pushing through an order in the dying seconds of the day which they know will distort the market. Because the end point is random, no-one knows exactly when the period will end.

In the closing auction, the PME (5 minutes plus random 30-second end period) occurs when a price moves more than 3% (for FTSE 100 securities) and 5% (for securities outside the FTSE 100 that are traded on SETS) from the VWAP (Volume Weighted Average Price period), which is calculated on the trading between 16:20 and 16:30.

Below is an article which appeared in Shares Magazine a couple of weeks ago. I am sure it will be ready differently depending on if you are a Bond Holder, Share Holder etc.

For as a Shareholder, it means hold on, do not bail out, as it's not over for us shareholders.

Wild hopes to zap BEs restructure

The battle of British Energy (BE) continues apace, with investors hoping to overturn the restructuring agreed last autumn.

Investors are hoping to call the bluff of bondholders, who stand to scoop 92.5% of the shares. BEs bonds are changing hands at 15% above their face value strange for a company supposedly in dire straits.

A predicted rise in power prices next year would mean a turnaround for BE. It worked out business plans based on low power prices, giving it a tiny valuation.

Rebels would like to see Eggborough, BEs only non-nuclear station, sold to pay off the bondholders. Eggborough cost over 600 million but has been written down to 150 million. Offers for Drax suggest 600 million is nearer the mark.

Supporters were dismayed last week when US hedge fund Appaloosa announced it no longer had a disclosable stake in BE and the shares crashed on the news.

Last years rescue deal came in two parts: a share for debt swap by bondholders, and a conversion of 3.9 billion of reprocessing and power station closure provisions into a 65% dividend sweep to the government.

BEs reprocessing contract with state-owned BNFL expires in 2006. Rebels argue that reprocessing is costly and unnecessary. Without the contract, BNFLs Sellafield plant would become an even bigger headache for taxpayers.

BNFL has agreed to slash its prices, so BE is cash neutral at 14 per megawatt hour (MWh). Beyond 21, the production cost is flat at 16.4 per MWh. These details are crucial to BEs valuation.

Wholesale prices collapsed after regulators forced generators to sell stations and introduced a commodity trading system favouring generators which could switch plants on and off. It penalised BE, whose reactors need to run steadily.

Based on the restructuring, our graph estimates BEs valuation at different power prices. It assumes a PE of 10.

Power prices are set to rise next year with the carbon emissions trading system. Tom Delay, chief executive of the government-owned Carbon Trust, expects a 5% to 15% rise in wholesale prices. BE would be a big winner.

BE needs the approval of the European Commission before the restructuring can be submitted to shareholders. A verdict is expected in midsummer. You may think it is all over but the affair still casts a sinister glow over the shares and the behaviour of the board.

Shares says: This saga is strange and unsatisfactory.

Investtech Analysis:

Positive Candidate (Medium term) - Mar 4, 2004
Has fallen 91% since the peak on 30 Aug 2002 at 84.50. Is within an approximate horizontal trend, which indicates further development in the same direction. Has given positive signal from a rectangle formation by a break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The volume balance is positive and strengthens the stock further in the short term. The stock has broken up through the resistance at p 6.80. This predicts a further rise. High risk.

Positive Candidate (Long term) - Mar 4, 2004
Has fallen 99% since the peak on 20 Jan 1999 at 730. Is within a falling trend, which indicates a continued decline. It, however, gave a positive signal from a rectangle formation at the break up through the resistance at 6.28. Further rise to 12.48 or more is signaled. The volume balance is positive and strengthens the stock further in the short term. The stock has support at p 3.50 and resistance at p 255. High risk with a difference between the lowest and the highest price of an average month of 129%.

Price very stable at 7.5-7.9 pence as it has been over the last few days. We have seen constant big buys going through and not many sells at all have gone through this week.

Price bouncing off the ten day moving average, 7.50-7.95 pence.

still sitting on that ten day ma Sue, perhaps bgy and pmd will do the double act and rocket together ;o)

Could happen soon erenr, need higher volumes.

SueHelen

Clearly this is a long shot, but interestingly, further increases in electricity prices were part of the news today. I wonder if BGY will benefit and if this will be reflected in the share price.

Regards

PTH

is still picking up sue helen

RNS Number:4891W
British Energy PLC
12 March 2004

12 March 2004

BRITISH ENERGY plc

THIRD QUARTER RESULTS - EBITDA, CONTINGENT ASSET AND NUCLEAR FUEL COSTS

Following the announcement of its third quarter results on 26 February 2004 and
the related results presentation, British Energy has recently become aware, as a
result of enquiries by investors, that the accounting for the fuel payments
under the new fuel services contracts with British Nuclear Fuels plc (BNFL) and
the implications for earnings before interest, taxes, depreciation and
amortisation (EBITDA) post restructuring requires clarification.

The Company's results presentation included a statement of EBITDA. This showed
EBITDA for continuing activities of #42m for the 9 month period ended 31
December 2003 and #26m for the 3 month period ended 31 December 2003 in
accordance with UK GAAP as set out in Slide 10 of the presentation (see
Appendix). However, as stated in the presentation, to produce an adjusted
EBITDA on a post restructured basis, it would be necessary to make a number of
adjustments which would not be in accordance with UK GAAP. Such adjustments
would include the profit and loss difference between the BNFL contracts in place
prior to the restructuring (historic contracts) and those that will be in place
after the restructuring (new contracts). This adjustment would involve an
addition of #37m to EBITDA for the 9 month period and an addition of #6m for the
3 month period which compares with the cash benefits between the historic and
new back end contracts of #137m and #33m (see note 3 Table 1) respectively.

In order to present EBITDA for the 3 and 9 month periods on a post restructured
basis, thetable below is provided for illustrative purposes. It is not in
accordance with UK GAAP and does not constitute a forecast.


3 months
9 monthsended ended
31 December
31 December
20032003

#m
#m

EBITDA continuing activities in accordance with UK GAAP 26
42
Benefit of new contracts (1)6 37
Adjusted EBITDA 32
79


(1) The financial benefit to the Group of the new contracts in any financial period
will depend, in
part, on the prevailing average electricity market price during that period


No other adjustment has been made which may be required to take account of the
potential impact on EBITDA of any restructuring related adjustments nor any
other changes which may impact the business.

Slide 10 of the presentation included a reference to capex included in operating
costs. As disclosed in the results, capital investment expenditure of #13m for
the 3 month period and #60m for the 9 month period has been expensed in the
profit and loss account. These amounts have been expensed to the profit and
loss account as a result of the significant fixed asset impairment at 31 March
2003. The Company will review the economic assumptions underlying the
calculation of fixed asset carrying values at 31 March 2004, in line with FRS11.
The amount that would be capitalised will be determined in accordance with FRS
15. There is no certainty that expenditure previously treated as fixed asset
additions will be capitalised in the future. In view of the foregoing it is not
possible to estimate the future impact on EBITDA.

During the third quarter there were extended outages at Heysham 1 and Sizewell B
with a lost profit contribution estimated at #50m.Due to the uncertainty about
the recurrence of unplanned outage this amount has not been included within
adjusted EBITDA.

The foregoing has dealt with the EBITDA implications. More details about the
differences between the historic and new contracts are set out below. The
accounting for nuclear fuel costs for the 3 and 9 month periods was drawn up on
the basis that the historic back end fuel contracts continued in existence. The
new contracts are conditional on, inter alia, completion of the proposed
restructuring. However, cash payments are being made to BNFL as if the new
contracts had become effective on 1 April 2003. This gave rise to a creditor
balance in the accounts which will be released, as part of other restructuring
adjustments, upon implementation of the proposed restructuring. The cumulative
balance of #259m at 31 December 2003 was disclosed as a contingent asset in the
results. The contingent asset has not yet been recognised in its financial
accounts and its recognition will occur only on the successful completion of the
restructuring.

Table 1 below shows the nuclear fuel profit and loss and cash costs under both
the historic and the new contracts for the 3 month and 9 month ended 31 December
2003. Thefuel costs comprise front end (fabrication, uranics and ancillary
costs) and back end (spent fuel services) costs.



Table 1 - Summary of Nuclear Fuel Costs (P&L) for 3 and 9 Month ended 31
December 2003 and associated cash payments


3 months
9 months
ended
ended31 December 2003 31 December 2003
P&L effect Cash P&L
effect Cash effect
effect#m
#m #m #m

Nuclear fuel cost under historic contracts 78(1) 98
233(1) 336

Nuclear fuel costs under new contracts 72(2) 65196(2)
199

Savings under new contracts 6 33 (3) 37
137(1) (3)

(1) As disclosed in the unaudited third quarter results to 31 December 2003.

(2) Includes back end fuel costs assuming an average electricity market price
of #17.8/MWh
as applicable under the new contracts

(3) Excludes stoodstill interest of #6m for 3 month period and #9m for 9
months period


As can be seen from the above table the cash savings from the new BNFL contracts
are #33m for the 3 month period and #137m for the 9 month period, whereas the
profit and loss saving is #6m and #37m respectively. This is due to the
difference between cash payments and amounts charged to the profit and loss
account under the structure of the historic BNFL contracts. Since the profile
of cash payments over the life of the historic BNFL contracts is weighted
towards current years the actual total cash payments for front and back end
costsfor the 9 month period would have been #336m, #103m higher than the profit
and loss account charge for the period of #233m.

To illustrate the impact of differing average electricity market prices Table 2
shows the total fuel costs for a 12 month period at market prices for
electricity of #16/MWh and #21/MWh (2002/03 money values) with an assumed total
nuclear output level of 67TWh, of which AGR output represents 58TWh. These
figures are illustrative only and do not constitute a forecast.Table 2 - Indicative
Nuclear Fuel Operating Costs (P&L)
for 12 Month Period


Average electricity market price as applicable under new #16/MWh(1)
#21/MWh(1)
contracts#m #m

Nuclear fuel costs under historic contracts (3) 319
329
Nuclear fuel costs under new contracts 225
351

Cost impact 94
(22)(2)



(1) The #16/MWh and #21/MWh price level quoted above are stated in 2002/03 money
values.

(2) The cost impact is cappedat #(22)m at average electricity market prices above
#21/MWh and at
prices above this level total fuel costs are unchanged on the basis of 2002/03
money values.

(3) Calculated using 2002/03 money values


British Energy's Proposed Restructuring remains subject to a large number of
significant uncertainties and important conditions, including receipt by the
Secretary of State for Trade and Industry (the Secretary of State) of a
satisfactory notification from the European Commission thatin so far as the
proposals involve the grant of State Aid by the UK Government, such aid is
compatible with the common market. The Secretary of State expects to receive
this notification by mid 2004. Furthermore, the Secretary of State is entitlednot
to proceed with the Proposed 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.

If for any reason British Energy is unable to implement the Proposed
Restructuring 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
British Energywere 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 that there would be any return to
shareholders. Even if the ProposedRestructuring is completed, the return, if
any, for shareholders will represent a very significant dilution of their
existing interests.

This document contains certain "forward-looking" statements as defined in
Section 21E of the US Securities Exchange Act of 1934, including statements with
respect to British Energy's business plans, the performance of its stations,
electricity prices and other matters that are not historical facts concerning
the business operations, financial condition andresults of operations of
British Energy. These forward-looking statements typically contain words such
as "intends", "expects", "anticipates", "estimates", "aim", "believe", "assume",
"should" and words of similar import, which are predictions of orindicate
future events or future trends. These forward-looking statements involve known
and unknown risks, uncertainties and other factors, which are in some cases
beyond the control of British Energy and may cause actual results or performance
todiffer materially from those expressed or implied from such forward-looking
statements. British Energy has identified some important factors that may cause
such differences in British Energy's Form 20-F annual report for the year ended
31 March 2003 filed with the US Securities and Exchange Commission.


Appendix

Slide 10 of Presentation on third quarter results
Financial Performance - EBITDA - Analysis3 months ended 31 9 months ended 31
December 2003
December 2003#m #m

Loss after tax and exceptional items (3)
(82)
Interest 29
54
Revalorisation 40
139
Tax (7)
1
Depreciation11 36
Gain on sale (37)
(37)
AmerGen loss/(profit) 21
(22)
Net exceptional credits(28) (47)
EBITDA continuing activities 26
42

Capex included in operating costs 1360



Note: This table does not take account of the impact of the revised BNFL
contracts, which would be one of the financial adjustments to be made on
Restructuring.


Net cash flow from operating activities27 1




Management will host a conference call for analysts and investors today - 12
March 2004 - at 1600 UK time (1100 - Eastern Standard time).

The conference call can be accessed by dialling, UK dial in: 0845 146 2004,
International dial in: + 44 (0) 1452 569 393, US dial in: 1 866 434 1089.

For further information please contact:

Paul Heward British Energy 01355 262201
Andrew Dowler Financial Dynamics 020 7831 3113


This information is provided by RNS
The company news service from the London Stock Exchange
END

QRTUUSSRSRROAAR

LONDON (AFX) - British Energy PLC has set an indicative target for nuclear
output for 2004/05 of 64.5 TWh which takes into account an estimated loss of 2.5
TWh resulting from work required to carry out cast iron pipework replacement at
its stations.
The move follows a review of the implications for further cast iron pipework
replacement after the recent unplanned outage at Heysham 1.
The cost of the replacement work will be absorbed within the company's
normal plant expenditureplans, British Energy said.
newsdesk@afxnews.com

British Energy sets nuclear output target of 64.5 TWh for 2004/05 - UPDATE

(Adds details) LONDON (AFX) - British Energy PLC has set an indicative target for nuclear output for 2004/05 of 64.5 TWh which takes into account an estimated loss of 2.5 TWh resulting from work required to carry out cast iron pipeworkreplacement at its stations.

The move follows a review of the implications for further cast iron pipework replacement after the recent unplanned outage at Heysham 1. The cost of the replacement work will be absorbed within the company's
normal plant expenditure plans, British Energy said.

The anticipated level of nuclear output in subsequent years is not affected by the work.

The measures are unlikely to materially impact results for the current year, but may exceed the levelof budgeted investments in the future. British Energy plans to give an further update with its full year results.

British Energy reiterated, that, if it is unable to implement the proposed estructuring, insolvency remains a possibility, leavingshareholders with little hope of seeing any cash and unsecured creditors receiving only a small proportion of what they are owed.

newsdesk@afxnews.com

Neutral (Short term) - Mar 19, 2004
Has risen 64% since the bottom on 17 Dec 2003 at 4.03. Is within a falling trend and continued decline within the current trend is indicated. On reactions back, there is resistance against the ceiling of the trend channel. The stock is approaching the support at p 6.20, which may give a positive reaction. The average difference between the lowest and highest price of an average month is 89%. The risk is therefore high.

Weak Positive Candidate (Medium term) - Mar 19, 2004
Has fallen 92% since the peak on 30 Aug 2002 at 84.50. Is within an approximate horizontal trend, which indicates further development in the same direction. Has reacted back after the break of the rectangle formation. There is support around 6.28, which now indicates good buying opportunities. An established break through this support will neutralize the positive signal. The stock has marginally broken down through the support at p 6.80. An established break predicts a further decline. The average difference between the lowest and highest price of an average month is 89%. The risk is therefore high.

Positive Candidate (Long term) - Mar 19, 2004
Has fallen 99% since the peak on 20 Jan 1999 at 730. Is within a falling trend, which indicates a continued decline. Has reacted back after the break of the rectangle formation. There is support around 6.28, which now indicates good buying opportunities. An established break through this support will neutralize the positive signal. The stock has support at p 3.50 and resistance at p 255. The average difference between the lowest and highest price of an average month is 89%. The risk is therefore high.

Hi Sue,

Just had a very quick look at this one. I'm always on for a little gamble, hence my recent purchase of shares in Millwall FC.

But in this case, the downside for shareholders post restructuring is surely massive dilution. If insolvency ensues the downside is ZERO.

What kind of upside do you see, prior to an announcement from the Secretary of State, that would justify a gamble in this company?

TSQ.

One can also read the contents of Sue's last 3 posts on http://www.investtech.com! :o)

One of the main risers today which is a surprise.. still much better than poor MT..

Spiked up 1/2p this morning and there is plenty of volume the last 3 days; perhaps they will get even higher in the course of time say around May time..

MAY...I wanted them to pay for a holiday before then. Oh well...

sue helen . view on the recent rise?

any price expectations short term

I am holding on for at least 10p.....hows that for a short term target..I would like to hear from Sue Helen as well..

Hi guys, been very busy lately hence the lack of posts.

Today was rather interesting, with good volume and some very big buys reported towards close. The price needs to break the 8 pence resistance first and if we have good volume then I would think 12-13 pence should be achievable in the short term. In addition, need Automatic Trades (buys) going through like today.

Something is definetely brewing here again.

Investtech Analysis:

Neutral (Short term) - Apr 5, 2004
Has risen 86% since the bottom on 17 Dec 2003 at 4.03. An approximate horizontal trend is broken up. A continued strong development is indicated, and the stock now meets support on possible reactions down towards the trend lines. Has risen strongly since the positive signal from a inverse head and shoulders formation at the break through the resistance at 7.00. The objective at 7.42 is now met, but the formation still gives a signal in the same direction. The stock is approaching the resistance at p 8.00, which may give a negative reaction. The average difference between the lowest and highest price of an average month is 60%. The risk is therefore high.

Positive Candidate (Medium term) - Apr 5, 2004
Has fallen 65% since the peak on 25 Sep 2002 at 21.19. Has broken through the floor of a rising trend channel. This indicates a slower rising rate at first, or the start of a more horizontal development. Has reacted back after the break of the rectangle formation. There is support around 6.28, which now indicates good buying opportunities. An established break through this support will neutralize the positive signal. The stock has broken up through the resistance at p 7.00. This predicts a further rise. In case of negative reactions, there will now be support at p 7.00. High risk.

Positive Candidate (Long term) - Apr 5, 2004
Has fallen 99% since the peak on 20 Jan 1999 at 730. Is within a falling trend, which indicates a continued decline. Has reacted back after the break of the rectangle formation. There is support around 6.28, which now indicates good buying opportunities. An established break through this support will neutralize the positive signal. The stock has support at p 3.50 and resistance at p 255. High risk.

price up on good volume

Now up 10% on very strong volume.. you were right on with your comments yeaterday Suehelen.. something is happening behind the scenes.Did it really spike to 14p..?

LONDON (AFX) - CGE Power, a company set up by six leading banks to buy financially distressed UK power stations, is to raise 2 bln stg of bank debt to fund its proposed spending spree, reported The Times without citing sources.

The report said the move is a change in strategy for the group, which has been trying to buy power stations by offering the stations's creditors debt in CGE in return for their existing debt.

The report says the cash injection is expected to help to bring to a head negotiations over several plants, including Drax, Europe's largest coal fired power station.

CGE, which is backed by four British high street banks - Abbey national PLC, Royal Bank of Scotland Group PLC, HBOS PLC and Lloyds TSB Group PLC- and two German banks, has been competing with established electricity generators, including Scottish Power PLC, to buy distressed assets.

mps/lam

Good call- SueHelen - maybe not such a lifetime gamble after all, done the 1 bagger heading fot the 2 bagger +++++ now.
Well done that girl....

Bring to top to read

Have been aware of this for a time and having read through the thread it appears that Evils main hopes centre around increasing electric prices, delay by various organisations in approving reconstruction, and the ability of shareholders to block reconstruction raising money via a rights issue.

I believe that is the story in essence...does this thread agree with this synopsis?

BTW SueHelen, congrats on non ramping info type posts

Another time to a have a look at these with a view to buying some possibly tomorrow. Price getting close to breaking 10 pence. There has been good volume in the last few days. Price is up quite a bit since this thread was started.

Just purchased 19,623 shares at 9.95 pence. Plenty of heavy buys have gone through at 10 pence.

Eeey gall you don't arf know how to pick em well done :o)!
Do walk on water as well! lol lol

Above 10 pence now.

Bit of a roller-coaster to-day - I get giddy watching it - but very much holding in there with my 20,000 despite being tempted to take handsome profit. I have been heartened for sometime by you posts SueHelen

Love you Peggysue got a pot full.

bookman

Is this looking good or what?

traders are talking the stock up to 15p on the back of the new contracts that will be re-negotiated at substantially higher prices in a few weeks. Also a bid could override the deal with the bondholders who are about to make huge profits at the expense of the shareholders.

Good day again today.

Think this is from Share Mag ....

BRITISH ENERGY (BGY) - 9.74P BUY

The share price has broken through key resistance points this week suggesting it will re-test recent highs in the low-teens. The fundamental backdrop looks sound with electricity prices falling from recent peaks but still maintaining an upwards trend.

The European Commission is expected to approve the 275 million grant to BE by the UK Government this summer removing another big uncertainty. The restructuring plan will then be almost home and dry leaving shareholders with around 7.5% of the equity.

If electricity prices average 27 per megawatt hour (MWh)in 2005 the shares should be worth 17p. This is based on how much profit BE will make over its cost base which has been cut to 14 per MWh.

Reprocessing costs at BNFL were slashed and decommissioning costs were written off by the government gifting BE a total of 3 billion. The share valuation assumes an average utility market valuation of around 10 PE.

Profit recovery this year will be limited as half of BEs contracts are fixed price so the increase in electricity prices will not make any difference until the contracts expire and are re-negotiated upwards.

These fixed-price sales contracts will still cover half of electricity output for 2004 and 2005 at an average price of only 18.7 MWh.

The excitement in profit terms starts in 2006 when BE could make 300 million pre-tax if electricity prices rise to 30 MWh. Improved management is cutting back on costs and nuclear outages when reactors have to be shut down for maintainance or to repair faults. Output should rise again this year by maybe 3% with the latest March monthly figure showing output up from 5.59 TWh to 5.91 TWh.

BE is currently valued at 68 million which represents the stub value of the remaining shareholders equity in this huge geared recovery play.

Shares Summary

Even without a possible renegotiation of the restructuring terms, which give bondholders most of the shares in exchange for writing off their debts and leave shareholders with a stub of 7.5%, the shares look substantially undervalued.

Electricity prices are expected to continue to recover albeit not back to the record levels of three years ago. The EU should approve the aid package and nuclear power could be around for a lot longer than sceptics expect.

BUSINESS: Nuclear generation and sale of electricity

VITAL STATS
Market capitalisation: 68 million
Historic PE 2003: losses
Prospective PE 2004: 25
Prospective PE 2005: 16
No dividend
NMS: 100,000 shares
Spread: 1.9%

and this from.....From UK-Analyst.com: April 28th 2004

Small Caps, AIM and Ofex:

British Energy added another 0.82p to 10.78p as bear raider Evil Knievil told listeners to his EvilCast that having bought heavily at sub 7p his one year target remained 20p in a worst case scenario or 200p in a best case scenario.

Would now be a good time to purchase, open to risk? Any thoughts on this one...

did anyone watch the IF programes they will understand the uk gov got to keep nuclear going as north sea gas will run out and would be too dependant on natuaral gas been with BGy b4 but in again today

Have bought today.
On a roll!! Gimme, gimme, gimme.......money, money, money. Whizz, bang, boing, bounce!

Looking jolly good for Tuesday. Very heavy buying reported this afternoon, a lot of Automatic Trades buys went through for big chunky amounts.

165,000 BUY reported at 12.3 pence after close. Something is brewing here. EK's 100 pence target may come, never know.

Yeeeeaaaaahhhhhhhhhhaaaaaaaaaarrrrrrr

Delayed 1,635,000 buy reported at 11.39 pence. From when the price was at 11.3-11.4 pence in the afternoon session.

It may be a good time for all to take stock over the long week-end and get our breath back on this one before it takes off again next week. I have good reports from a retired BNFL friend that the future is bright.

The future is bright. Soon will be seeing some real FIREWORKS - I will be inspecting them on the horizon. LOL

Hope you dont mean somebody will blow them up as thats the last thing we want.

Ok Fireworks is the wrong word, maybe Moonrocket is the way this is going to lift off, slow rise then whooooooooooooosh and away.........

Market Report: Bulls generate excitement in British Energy
Michael Jivkov
30 April 2004


What is going on at British Energy? In February, the electricity generator's shares were set alight by news that the US hedge fund Appaloosa a specialist in distressed debt scenarios like BE had taken a 4 per cent stake in group. They soared to 10.5p but were sold-off heavily after it emerged that Appaloosa had sold down its holding to below 3 per cent and made a quick profit.

Since then, BE shares have again been on the up and broke through their 10.5p high earlier this week. Yesterday they rose again, 1.3p better to a new 12-month high of 12.3p. Those buying into the stock believe that the company is fundamentally undervalued, despite the fact that current shareholders face a massive dilution as a result of the pending debt-for-equity swap, which aims to wipe out the company's massive borrowings.

Under the terms of this restructuring, BE's present shareholders will control 7.5 per cent of the company once the debt-for-equity swap has been completed, with the remainder going to its creditors. Ever since it was announced traders have been trying to work out what this arrangement means for the value of BE's current shares, and the consensus is that they should trade well above 10p and possibly as high as 20p.

There is a further bull case for BE. The debt-equity restructuring was hammered out early last year. But since then, BE's fortunes have improved greatly, thanks to rising electricity prices in the UK. And as a result, some investors now believe the terms of that deal should be renegotiated, giving BE's shareholders a greater slice of the post-restructuring company. Such a scenario, should it come to pass, would certainly send BE's share price sharply higher.

http://news.independent.co.uk/business/analysis_and_features/story.jsp?story=517029

Looking good for next week.

Could soar next week: ABN AMRO bullish buy research note coming next week.

Market report
By Yvette Essen (Filed: 01/05/2004)

British Energy was another talking point as the electricity generator rose 1.3 to 12.3p - its highest level for more than a year. Volumes reached 17.6m, compared with the daily average of nearer 3.5m. Market chatter said a major investment bank, possibly ABN Amro, is putting the final touches to a bullish buy research note.

http://www.opinion.telegraph.co.uk/money/main.jhtml?menuId=243&menuItemId=2839&view=&grid=M3&targetRule=1&_DARGS=%2Fmoney%2FMenu%2FSideMenuItemsFrag.jhtml.1_A&_DAV=-1

This could be a ramp on a massive scale.
Look at the graphs - when the selloff comes it will be savage!!
Take care!!

This baby is going to take a big dive on Tuesday.
Once the big sellers come it the price is going south big time.
These are probably worth 4p max.

I only bought because I saw someone I think is Oh so Strong on the thread. Never mind the research. Bull!!!! Now!!!

Up 10.0% today theendisnigh. Up 80% since this thread was started.

Those bailing out. Got to pity them really!!

Anyone has any ideas what target pice we are looking at by the end of the week????

You little beauty.
Happy to hold.

Getting out at 14p should not attract pity if bought at 4p Remember the great man who said "I never lost money on a stock I sold at a profit" !!! I took half to-day.

Good point.

Very good call sue helen.

Well sue you got me today but what will wednesday bring.
Chaps if you bought in today hold on to your hats.
I predict a big big fall!!
you have been warned - dump before its too late!!

These are going to be up again tomorrow.

Sue - You must be well on your way to a new set of wheels by now, the way you have been picking of late :o) CFP tripped up today though!... Should have gone into BGY! Well done anyhow....

So sorry sue but there is no way these are going north again!
The only way is down - once the big boys start to sell there
will be blood on the floor and all those small punters will
get their fingers burnt again.
you have been warned - leave this one alone its gone too far!!

Up 7.5%, 15.1-15.6 pence. Taken my profits at 15.46 pence, though more gains could come. 100% + gains since the thread was started.

Yes Yes Sue we all know U're an ace trader :O) .....

wow watch it fall now!!!

So SueHelen led us on repeatedly and then dumped us - good for her (or him!) - I have long been suspicious of the absolute true value of threads. It is so easy to conjour for ones own interest. DYOR - again well done Sue Helen

Guys give SueHelen a break - she or he has been brilliant. I haven't though I lost a lot but that was due to my lack of backbone! Maybe I will make it back when it falls. Good luck everyone - wishing you wealth and happiness.

Looks like another opportunity to buy now.

Hate to say I told you so but - I told you so.
There is very little chance of the small investor
making profits out of this special situation.
Too many people "in the know" have the chance to
duck out at just the right time. Leaving the shmucks
with the losses.
To all short term small investors - take very little
notice of these boards - go with your instincts
but dont be led by the promise of a quick buck.

is it worth buying?????

theendisnigh doesn't think so.

can anyone explain to me when 2x 2 mln buys go through, that the share price doesn't move?

Does anyone think these shares will recover this week???

NO

cashcaptain

I have the same probs with (cfp) 4 mil more buys than sells yet the price never went up! How can that be? Can this stock recover? Look at the chart, shares worth 6 each 4 years ago and now about 10p! and have been for about 18 months. Come on I don't think this stock is going anywhere unless there is some serious government backing. I am watching and waiting.

wow!

Been looking at these but busy last couple of days, so very happy that i didn't buy before this drop!!!

Commiserations to those that lost, maybe once a base is established we can all have another go at these???

To those thinking about buying back in!!
DONT - The big boys / traders buy in - the small punters follow.
The price rises to a stupil level and the guys in the know
sell before the chumps get wind of whats happening. The big boys
buy back in just when this small fry duck out and so it goes on.
You dont have a chance - stay away would be my advice!!

Theendisnigh - I take it that was not your 1,000,000 'buy' at 16:40 Fri then!

BRUSSELS TO BACK FIVE BILLION POUNDS BAIL-OUT OF BRITISH ENERGY

The European Commission is set to approve the proposed bail-out of British Energy (LSE: BGY.L - news) , so removing the largest obstacle for the five billion pounds rescue package. In a move that will infuriate environmentalist groups such as Friends of the Earth and Greenpeace, the European Commission is set to impose only minimal conditions on the deal that will save the company that provides 20 percent of United Kingdom's electricity generation needs. The two environmental groups had argued that the government's assistance breached EU competition laws.

http://uk.biz.yahoo.com/040515/80/etmp0.html

Reuters Business News

Saturday May 15, 03:26 PM

EU seen agreeing British Energy deal within 5 weeks
BRUSSELS, May 15 (Reuters) - British Energy Plc is expected to win approval from the European Commission, probably within three to five weeks, for a bail-out plan to aid the troubled firm, a person close to the situation said on Saturday.

The company, the UK's largest nuclear generator and producer of around a fifth of the country's electricity, is surviving on a state loan after weak power prices pushed it towards insolvency.

A restructuring deal was drawn up with its creditors and the British government last year that would favour bondholders and leave shareholders with next to nothing.

This deal was signed on October 1 and the European Union's executive Commission has since been scrutinising the plan to see if it constitued illegal state aid.

But the person close to the situation told Reuters on Saturday that a draft decision being circulated through the Commission approved the bail-out plan.

He said it would place limits requiring the utility to hold down its expansion and to take steps to deal with its nuclear liabilities, saying the approval was likely to come in the next three to five weeks. He gave no further details.

British Energy (LSE: BGY.L - news) ran into trouble last year as prices for its electricity fell below the cost of production in an oversupplied market after the industry was opened to competition.

The restructuring deal drawn up last October handed control of the stricken producer to its creditors in exchange for forgiving more than half its 1.3 billion pounds ($2.28 billion) of debts.

Investtech Analysis:

Positive Candidate (Medium term) - May 14, 2004
BR.ENERGY ORD 44 28/43P is in a rising trend, but is now testing the ceiling of the trend channel. This may give a reaction down, while a continued rise within the trend channel may be expected for the longer term. Has met the objective at 12.48 after a break of a rectangle formation. The price has now fallen, but the formation indicates further rise. The stock has support at p 10.00. The stock is overall assessed as technically positive for the medium long term.

The price could rally again next week on back of the European Union approval reports in Saturday's press.

But what does it mean.. will we reach 100p or just 20p nextweek.

20 pence is more likely in the coming weeks as things stand. That is still an 80% rise from these levels which is possible.

LONDON (AFX) - Shares in British Energy firmed in opening trade after press
reports suggested the European Union will approve a 1.5 bln stg bail-out plan to
aid the firm within the next three to five weeks.
A restructuring deal drawn up by the British government has been under
scrutiny by the EU's Executive Commission since October 1 to see if it
constituted illegal state aid. The deal would give control of the company to
bondholders, and leave shareholders with almost nothing.
Shares in British Energy gained 0.55 pence to 12.00.
bge/rn

Sue Helen: Where do u see the shares in the coming weeks knowing that the markets are swinging up and down and possibility of the bail out. Have u bought back? when do u expect to buy back again. I like how u trade and your moves. Alwasy well inform. Thanking you in advance.

2.5 million late trade might be a buy.

I too hope for 20p SueHelen.....it is achievable...

It has been to 16.0-16.75 pence three weeks ago from when the thread was started at 7.60-7.70 pence..I've got no idea where it is going next as I have not been monitoring this stock at the moment. I will have finished my exams by end of next week when I will have another look where this is heading.

SUE Helen, regarding the bail out, do u think is best to take profits before the bail out is announced? Would we loose if bondholders decide to restructure? Tell more plse.

Also, I checked it at 5.pm and there was a buy for 1.5mio shares. At present this share (or the electricity sector) is on vogue. so let hope as it can take BGY upwards. Always check your economic sectors if u are trading short term

Could EK be right with his estimations and the share price rise to 100p.


http://news.independent.co.uk/business/news/story.jsp?story=526240

http://news.independent.co.uk/business/news/story.jsp?story=526240

Sue Helen, this requires you inmediate attention. pls.

still rising after last weeks rise.. 100p here we come..

Just look at those AT buy trades, seems it's one big buyer picking up stock in small amounts,[ 100,000 ].

Like Evil's slant on this. I believe he is right in that if Europe ratifies the restructuring then the price is on the up anyway given the positive movement in the wholesale electricity market. Has anyone any suggestions as to how we might quickly get some large shareholders on side with a view to possible renegotiation of the deal, or is it too late at this stage?

FF

Sue Helen might tell you on friday.

It seems the TA is giving the buy signal, see the RSI and MAC, and the 20 60 MA. I have top up. hopefully we get to 20p.

MACD and RSI moving upwards now, its has rising steadely all this time since it drop, I m very sure the move to 20p is eminent now.

SUE HELEN: come on where are u?

spiked to 13p an hour ago..

YES, MACD and RSI rising. 20 and 60MA are pointing upwards. The upper bolling has been broken and twisting upwards. To enhance the buying signals, the volumen has been rising and the volatility been increasing. Hold tight as we can reach 16p by tomorrow and 20p by monday or tuesday.

Will top up massively tomorrow, Any views.

Yes keep buying.....

Well done BGY, at some point today it touched the resistance built back early May (14.20 I think) it gains 3.08 which sets a nice start up for next week. Upper bollinger line was now twisted upwards strongly as well as the MACD and RSI, All given a short term bullish tone. Share volumen also backs this.

Maybe those who have access to specialised technical analysis tolls, can elaborate their theories.

Also if you have any news of the recontruction scheme for BGY, can elaborate as to how it may impact the price if news are to be release next week (worst cse sceneario). thanks

SIZEWELL B IS TO RETURN TO PRODUCTION NEXT WEEK. Source (Bloomberg TV)

Sue Helen, I would appreciate your input here, since you were the one who started this thread. There are a lot of people in this because they believe in you. Please honour this request. Thanking you.

Well I should know better, after twt, moni, and energis (two of those three I saw from the sidelines!) I have been tempted. Small position which no doubt I will regret...but hey you have got to buy a ticket sometimes!

Hi Xmortal, it is wrong for you to state that I am obliged to honour your request. I am duly doing so as I said I would do so on Friday evening....more or less everything one needs to know is already stated on this thread. I have already posted abundance of information here.

I would like to my stance clear first. I started this thread when the price was at 7.6-7.7 pence when the price was near it's bottom, it is the same things with most of my stock selections, bottom fishing? Now the price rose to 16.0-16.75 pence within 2 months so I took my 100% profit and sold out at the beginning of May. I never fall in love with a share, I always wait for my 100% profit to come then I sell out irrespective of the price going up again and move on. Good Investment Strategy...

The price is still way above at what the thread was started on....so I do believe everyone should have made some money. What you have done wrong here is got too excited from buying at these levels...you just can't make statements like 20 pence by Tuesday...which you did. There is a higher risk now at these levels than they were at 7.6-7.7 pence.

What you need is understand is the price could be overvalued or undervalued as the header title suggest it is a gamble. The price could soar to 100 pence or go back down to 6 pence...
A significant re-rating could happen....or more importantly a significant dilution....which will mean shareholders will be left with about 6 pence for each share they hold on current restructing terms...they have mentioned this on many news releases...Never forget the statement that came from the company.....in all this euphoria...the m and ms are going to have a field day...be careful...don`t get caught. with shareholders to get 7.5%...this is already near the top...Until the shares have been fully diluted...this share...(not the company), still maintains a high element of risk.

It is up to the individuals to decide now based on the risk based. At 7.6-7.7 pence these were very low risk hence I started this thread as if you see with all my threads the price has never dropped below from the price they have been tipped from myself. A penny downside was the maximum. So this thread was duly started by myself. Now there is a potential 50% drop....By all means these could carry on rising to 20 pence...or even more...it's a bigger gamble from these levels and all I can say now is invest what you afford to lose at these levels. The price may rise more as the EU approval comes but then the problem is the current terms maybe implemented straight after that hence it could either way. For a significant rise to continue the terms of the restructuring will have to be re-negotiated which may not happen as the company has led us to believe...they spent millions on lawyers fees for the bail out...possibility is there the terms may change in favour of the shareholders or they may not...again it is a gamble. In addition, the company has stated they will delist the shares if the shareholders do not agree to the current restructuring terms.

HEALTH WARNING:

If you are a holder of this stock then never leave the screen...always keep an eye on the price irrespective of nothing happening with the price. A statement suggesting there is no reason for the rise has come several times before during market hours with the usual dilution statement.

I hope this has made the situation clearer for everyone. I will provide an update of my Technical Analysis on these sometime tomorrow.

Best Wishes...

Thanks Sue for your input. I already knew about the risk, What I wanted to know was your input from a Technical analysis point of view, which will be still apreciated. Soz if you feel I pushed it. Thanks

SUE,

No one who have made good profits from your research are paying you for the time you put in,so you are not obliged to anyone after all you do have a life outside of this board.Can you tell me what % stop loss you use for say a share like CDN, my feeling on BGY which i bought at 11.50p is to sell at 15-20p before the 16th june.

Technical Analysis (TA)

The volatily risk is extreme with BGY, easily the most volatile stock on the LSE. Caution : Hence my TA analysis may not prove to be spot on.

1. Support at 11.70 pence which is the floor of the trend channel
2. Relative Strength Index (RSI) is at 74 which is technicallly overbought - though RSI could easily rise to 85 with another 10% early next week before a short term reversal. With the RSI already overbought they maybe another 10% maximum rise on these for the time then being then a short term reversal. May start to rise again thereafter...or traders may decide to take profits as RSI is in the overbougt position not heavily overbought though even so...
3. Next Resistance points at 16.5 and 17.5 pence
4. A continuation of the rise depends on Automatic Traders (AT) buyers continuing to put buy trades through on the order book. Generally only AT buys moves this stock substantially. Ordinary buy trades are retail investors buying and at most times do not have an impact on the price.
5. MACD is bullish, with the blue line above the green line
6. There is a big negative signal on the charts....the price is currently above the upper bollinger band which indicates a potential reaction back down to below 13 pence...In addition, a Harami Cross has appeared on the candlesticks after friday's close which could indicate a reversal of the bullish trend...in that some weakness in the price may be forthcoming in the short term. For the short term, the price may come down with the harami cross appearing and the price being above the upper bollinger band. For the first time in the last month, the price has got way ahead of itself in that it has crossed the upper bollinger band line.

These are my views from my TA expertise, my TA may prove to be correct or wrong...

GoodLuck !!!

Sue, Thanks you very much. Have a good weekend.

As always after my own analysis I use TA tools for confirmation. In the case of the bollinger bands...I can confirm my TA is right in that there is a negative signal.

There are no buy signals on Best-Charts and 1 sell signal has appeared under Bollinger Bands.

You may see a short term reversal....

GoodLuck !!!

as always Sue Heln you help is much appreciated. Your fan xmortal here.

How TA can change in a flash:

The upper bollinger band has risen again today (which can be seen on the MoneyAM charts) hence the price has stayed stable....

evil bought another 500k

mayiguo - how do you know?

it's on t1ps.com's BB, you need to subscribe to read

The price has fallen because their was a negative signal on the charts which I reported about in my TA on Sunday (see my posts on saturday and sunday)...coupled with the RSI in an overbought position.

nowhere to go but down & down from here!!

Sue Helen. My knowledge/confidence in TA is not high , however with a volatile stock such as this its probably a very useful addition to the armoury. Can you recommend a good guide to understanding charts and do you use any allied software to assist your trading decisions. What is your view of the BE chart now? Incidentally do you have a view on the likelihood of a renegotiation of the restructuring to shareholders advantage?

Hi Fast Freddy...I have included everything you need to know on the restructuring in my post last Saturday. Will be very helpful to you if you read it. Read it twice if needed be...but do try to understand the permutations.

I will update you on the TA tomorrow evening....I'm out for most of the day tomorrow.

I managed to get my TA right in my post on Sunday post courtesy of analysing everything for an hour or two...I did point out to Xmortal and others that it was wrong off them to suggest 20 pence my Tuesday etc with this volatile stock....I will provide you an updated TA perspective tomorrow..Though on top of my head the price did break the support at 11.80 pence today which was not good news...which was followed by a drop to 11.30 pence but did climb back up to close around 11.70 pence...The price needs to get back up 11.80 pence as soon as possible for the rise to continue otherwise the price will form a horizontal development for a few sessions or drift down to 11.00 pence. There is some good support at 11.00 pence. AT Buyers will support the 11.00 pence price.

With regards to how I analyse my TA : I always analyse everything on the charts myself first...I know in my mind at what points the RSI becomes overbought, oversold etc...then what I do is use some charting tools though they are not always reliable. Hence I use 3 or 4 charting web sites for confirmation of my analysis...though my final decision does rest with the TA that I have done.

Some websites in preference order:

www.bigcharts.com
www.best-charts.com
www.investtech.com
www.yahoo.co.uk/finance

PS. I am not a holder of this stock...I have posted this warning before...but if you are a holder of this stock then whatever you do just do not leave the screen throughout the trading session.

GoodLuck.

Further to my post last night Freddy...the price has rose today as duly thought it would as the price went up above the support at 11.80 pence early this morning. The level of 11.80 pence should provide some good support now in case of the price dropping back.

Europe thinks again on scrapping nuclear power
Fri 11 June, 2004 11:38


"Nuclear power has gone from being very peripheral to being taken seriously again."
Dieter Helm at Oxford University


By Stuart Penson

LONDON (Reuters) - Europe is finding it harder to rule out a future for nuclear power as governments face the need to tackle climate change without risking the future security of energy supplies.

Nuclear's ability to generate power round the clock without sending carbon dioxide into the atmosphere is testing the resolve to abandon a hugely expensive industry still tainted by the legacy of past disasters at Three Mile Island and Chernobyl.

Helping the industry's case are doubts that the current attempt by governments to spark a green power revolution by building hundreds of windfarms can deliver big enough cuts in CO2 or ensure that the lights stay on after existing reactors have shut down.

"Nuclear power has gone from being very peripheral to being taken seriously again," said Dieter Helm, a fellow in economics at Oxford University.

"The exclusive focus on renewables and energy efficiency in several social democratic governments in Europe is not delivering enough carbon savings to keep on track with the ambitious climate change targets."

Rising prices for fossil fuels and Europe's growing reliance on gas imported from outside the region have also encouraged policymakers to think again about phasing out nuclear, which has high initial capital costs but low production costs thereafter.

Industry sources say Britain is likely to conduct a serious reappraisal of nuclear power but because of the issue's sensitivity the question will not get a public airing until after a general election expected next year.

Britain put on hold its nuclear building programme with the completion in 1995 of the Sizewell B station in eastern England and is scheduled to close its last reactor in 2035.

A sharp drop in power prices recently forced the government to rescue privatised nuclear giant British Energy from bankruptcy, although prices have since recovered.

Despite the BE debacle ministers were careful to leave the door ajar to a new generation of reactors when they updated their thinking on energy policy earlier this year.

REACTORS GET CHEAPER

Analysts say the up-front costs of new reactors are dropping because they are smaller than earlier models.

"I think there is evidence beginning to build that the capital costs of nuclear plants will be substantially lower than in the past," said Philip Ruffles, vice president of The Royal Academy of Engineers in London. "Plants would be smaller, roughly half the physical size of current plants."

Crucial to the viability of new reactors would be the cost of capital and the length of time taken to build the plants, other analysts said.

Nuclear costs must include the management of waste, problems with which remains central to the argument of the industry's widespread opponents.

"The biggest problem for nuclear is the disposal of radioactive waste in a politically and publicly acceptable way," said Frank Barnaby, a nuclear security specialist at the independent Oxford Research Group.

Nuclear power is making headway in some countries. Finland is building a three-billion-euro reactor, its fifth. France, which already relies heavily on nuclear power, is pressing ahead with plans to build a prototype pressurised water reactor as it looks beyond the retirement of its existing plants.

Shifts in opinion are also evident in Sweden. A majority voted in 1980 to phase out atomic plants by 2010 but a recent Gallup poll showed more than 55 percent in favour of keeping existing plants.

The Swiss last year voted not to scrap nuclear power after the government argued it would be premature to shut down a cheap energy source that meets 40 percent of its power needs.

How long can this momentum go on for? Thinking about having some of these for the short term as it appears to be gathering strength. Anyone got any views for the next few weeks?

Results in the morning - already stated they are worth very very little - leave if I were you!

What a battering it took this morning, almost 18% down by 11am. It emerged unscathed and gained 0.80% by close. The bulls won over the bears...... I think today it demostrated that there are people who bet on the short term price. (upwards in my opinion) See 1 year charts.

There are investors who will believe BGY's shareholders can make. The results of today can be viewed as god news in my opinion. It will be good to see what Eveil Kneivel thinks of this and the performace BGY displayed today!!! Im holding and I think it has further to go.

Read below



LONDON (Reuters) - British Energy, the UK's biggest electricity producer, has reported a return to profit for 2004, although it says there is still uncertainty over a key restructuring deal.

British Energy BGY.L said on Thursday it made a post-tax profit, after exceptional items, of 234 million pounds for the year ending March 2004. In the previous year, it made a loss of 3.9 billion pounds.

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

British Energy, which produces around a fifth of the country's electricity, is surviving on a state loan after weak power prices pushed it towards insolvency.

It drew up a restructuring deal with creditors and the government last year that is set to favour bondholders and leave shareholders with little.

The European Commission has been scrutinising the deal to see if Britain's state aid to the company was illegal.

"Progress has been made towards the completion of the restructuring, but it still remains subject to a large number of significant uncertainties," British Energy said in a statement.

A source familiar with the matter has told Reuters that British Energy is expected to win European approval for its restructuring.

Shares in British Energy, once part of the FTSE 100 index and now just a penny stock, were down 4 percent at 12 pence in morning trade. At that price, the company has a stock market value of around 83 million pounds.

What a battering it took this morning, almost 18% down by 11am. It emerged unscathed and gained 0.80% by close. The bulls won over the bears...... I think today it demostrated that there are people who bet on the short term price. (upwards in my opinion) See 1 year charts.

There are investors who will believe BGY's shareholders can make. The results of today can be viewed as god news in my opinion. It will be good to see what Eveil Kneivel thinks of this and the performace BGY displayed today!!! Im holding and I think it has further to go.

Anybody got any further thoughts on british energy?, up to 13 bid today.....

The MACD indicators are positive now: hopefully in the next few days we will see moving high. Unless so disastrous news arrive. At this point I dont think so, The trend is upwards so lets keep fingers cross and enjoy the ride.

is BGY tipped in share mega, any one got any idea?

yes in share mag today as a buy! what's going on??????????

It's going up cash.

British Energy denies rights issue rumours



LONDON (Reuters) - British Energy has denied rumours that a shareholder action group is planning to vote down the firm's proposed debt-for-equity swap in favour of a rights issue.

The stock rose almost 10 percent on Friday on newspaper reports that a shareholder group would push to refinance the debt-laden company through a five-for-one rights issue at 12 pence each.

"There is no shareholder action group," British Energy spokesman Andrew Dowler told Reuters. "And there is no institutional buying that we're aware of."

"It's illogical at best to think a rights issue would fill the company's finance hole," he added.

Shares in the company were up 3.2 percent at 16 pence at 12:07 p.m. after touching a year-high of 17p earlier in the day. A London-based trader said people were buying on the back of expectations of a rescue plan

Well someone does not care what British Energy say.
The second largest shareholders are a american mob with a track record
of taking profitable stakes in uk companies (m&s for one).
If they want a rights issue they may get one!!

I think Brandes Investments who have a significant stake in BGY maybe behind the rights issue story floating around. Brandes Investments are also causing developments in M&S.

This is a pivotal moment with regards to where the price will head from these levels. If the rights issue follows as outlined in the header post then the price will soar and the existing shareholders will not have their holdings diluted now anywhere near under the existing arrangements and if a rights issue does not follow and the restructuring is carried out with the significant dilution for existing shareholders which the company keep repeating in their news releases then the price will fall back.

PS. I do not have a position in this stock.

Market Report: British Energy slips as cash call rumours wane
Michael Jivkov
03 July 2004


British Energy was yesterday again the talk of the Square Mile as investors continued to speculate about the electricity generator's future structure. The latest excitement to surround the company has been caused by rumours that an action group of BE shareholders has been formed with the aim of forcing the company to raise fresh cash from the stock market. The aim of this would be to help the company finance its borrowings and thereby prevent it from having to execute its planned debt-for-equity swap, which would wipe out virtually all shareholder value.

However, a spokesman for BE yesterday denied any talk of a shareholder action group having been formed and noted that it would be impossible for an equity issue to raise enough cash to cover the company's existing liabilities, which run into billions of pounds.

Meanwhile, analysts argued that the company's future is firmly in the hands of its creditors. And investors only have to look to the bond market to see that this is the case. BE bonds trade at 175p in the pound. This means that bond investors are willing to pay over the odds for BE bonds, which were issued at par or 100p, because they are certain that the company's bonds will be converted to equity via the swap. This allows them a cheap way to gain a stake in restructured BE, which is likely to be a highly profitable concern.

Although BE's refinancing has yet to ratified by shareholders (a vote is expected before the end of the year) analysts believe it is very unlikely they will vote down the proposal. "It would be suicide for shareholders," one analyst argued. He noted that according to the agreement that BE's management struck with creditors last October, if shareholders were to oppose the restructuring they would see all of BE's assets transferred to a new company controlled by creditors and be left owning what is in effect a shell company. BE shares finished the day 0.5p lower at 15p as a way above average 29.5 million changed hands.

http://news.independent.co.uk/business/analysis_and_features/story.jsp?story=537659

Heavy dealing continued in British Energy, as traders said private investors were piling in. The group is awaiting approval for its refinancing package, expected in the autumn. British Energy rose to 17p at one stage, later closing .5 lower at 15p. Its 'A' shares, without voting or dividend rights, jumped 1.87p to 13.62p.

http://www.money.telegraph.co.uk/money/main.jhtml?menuId=243&menuItemId=2839&view=&grid=M3&targetRule=1&_DARGS=/money/Menu/SideMenuItemsFrag.jhtml.1_A&_DAV=-1

Among the smaller companies, British Energy eased 0.5p to close at 15p after a company spokesman claimed a 400m rights issue would be insufficient to cure its financial woes. But traders said there were still buyers around for the stock, thanks to wild rumours that the nuclear generator could be a takeover target for French rival EDF.

http://www.guardian.co.uk/business/story/0,3604,1253092,00.html

SueHelen

Would welcome your informed opinion on why down 10% this morning

PS - some 20 mins later its back to 3% so I think the answer is "a lemon"

Hi Oakapples142, all I know is speculative traders are driving this stock either way. Just look at the variations in the weekend press stories I posted. All kind of permutations are being thrown around at the moment by speculators. Hence expect the price to be volatile.

PS. I do not have a position in this stock.

The Daily Telegraph. 12/07/2004

FRESH HOPE FOR BRITISH ENERGY INVESTORS

Shareholders in British Energy have been thrown a lifeline by the Financial Services Authority, which has decided to close a loophole in its listing regulations that may scupper the current rescue plan for the company. British Energy, the UK's largest power producer, called in the government after its share price collapsed when it revealed its UK operations were losing five million pounds a week, due to trading conditions at that time. The debt for equity swap that ensued from the deal struck with its banks left investors with only 2.5 percent of the company. A spokesman for BE said: "We had to sign binding agreements in October. Without an agreement the company would have gone into administration and shareholders would have been left with no return at all."

Presumably they are talking about http://www.fsa.gov.uk/pubs/cp/cp04_08.pdf (see section 7)? Preumably if this was implemented in time then BE shareholders could vote against the restructuring in its present form without BE being able to delist the shares and go ahead anyway (as they have said they will).

RNS Number:2779A
British Energy PLC
29 June 2004

29 June 2004



British Energy plc

Notification of Interest in Shares pursuant to Part VI of the Companies Act 1985
(as amended)

In accordance with Part VI of the Companies Act 1985 (as amended), please note
that the interests of Cater Allen International Limited (CAIL) in the ordinary
shares of British Energy plc has increased to 18,749,022 ordinary shares or
3.02% of the issued share capital.

This holding has arisen from stock loan transactions done under the relevant
approved documentation as a principal trading member of the London Stock
Exchange.


This information is provided by RNS
The company news service from the London Stock Exchange
END

HOLBLGDLLUDGGSC

RNS Number:6973A
British Energy PLC
09 July 2004

9 July 2004


UK COMPANIES ACT 1985 - SECTIONS 198-203 - British Energy plc (the "Company")

This notification relates to issued common stock of the Company ("shares") and
is given in fulfilment of the obligations imposed by sections 198 to 203 of the
Companies Act 1985 (the "Act").

The Company was notified that as at close of business on 7 July 2004, The
Goldman Sachs Group, Inc ("GS Inc") of 85 Broad Street, New York, NY 10004, USA,
was interested, by attribution only, in a total of 22,771,077 shares.

Of these 22,771,077 shares:

* The interest in 14,965,852 shares arose from the interest held by Goldman,
Sachs & Co. ("GS&Co."), a direct subsidiary of GS Inc, acting as custodian.
These shares are, or will be, registered in the name of Goldman Sachs
Securities (Nominees), Limited.

* The interest in 4,380,225 shares arose from the interest held by GS&Co.
acting as custodian of 58,403 American Depositary Receipts ("ADRs"). These
ADRs are, or will be, held at the Depositary Trust Company of New York.

* The interest in 3,425,000 shares arose from a beneficial interest held by
Goldman Sachs International, a direct subsidiary of GS Inc, these shares
are, or will be, registered at CREST in account CREPTEMP.


This information is provided by RNS
The company news service from the London Stock Exchange
END

HOLBUGDRBSGGGSC

SueHelen, thank you for all your posts on this topic but I am confused about your last two. Presumably they explain why the price seems to be dropping despite the fact that there was some positive news for shareholders (ie: the FSA may change the listing rules and thus give shareholders some power to get a better deal in the restructuring). To a novice like me all this seems very strange, are you able to shed any light on this please?

RNS Number:9575A
British Energy PLC
16 July 2004


16 July 2004


UK COMPANIES ACT 1985 - SECTIONS 198-203 - British Energy plc (the "Company")


This notification relates to issued common stock of the Company ("shares") and
is given in fulfilment of the obligations imposed by sections 198 to 203 of the
Companies Act 1985 (the "Act").

We hereby notify you that as at close of business on 14 July 2004, The Goldman
Sachs Group, Inc ("GS Inc") of 85 Broad Street, New York, NY 10004, USA, was
interested, by attribution only, in a total of 25,786,077 shares.

Of these 25,786,077 shares:

* The interest in 14,965,852 shares arose from the interest held by Goldman,
Sachs & Co. ("GS&Co."), a direct subsidiary of GS Inc, acting as a
custodian. Theses shares are, or will be, registered in the name of Goldman
Sachs Securities (Nominees), Limited.
* The interest in 4,380,225 shares arose from the interest held by GS&Co.
acting as a custodian of 58,403 American Depositary Receipts ("ADRs").
These ADRs are, or will be, held at the Depositary Trust Company of New York
("DTC").
* The interest in 15,000 shares arose from a beneficial interest by GS&Co.
in 200 ADRs. These ADRs are, or will be, held at the DTC.
* The interest in 6,425,000 shares arose from a beneficial interest held by
Goldman Sachs International, a direct subsidiary of GS Inc, these shares
are, or will be, registered at CREST in CREPTEMP.


This information is provided by RNS
The company news service from the London Stock Exchange
END

Hi LordCake, the last 3 RNS are stating that Goldman Sachs have lately increased their stake in British Energy. In addition, Cater Allen International Limited (CAIL) have increased their stake too. The price is consolidating at 15 pence at the moment. See my previous posts, maybe a good idea to read the thread from the start. You should then be able to understand the scenario as the header title suggests : British Energy - One in a Lifetime Gamble Opportunity. (BGY)

PS. I do not have a position in British Energy.

Today's Daily Telegraph :

British Energy rose .5p to 16p on heavy turnover of 42m shares. Traders said the group is meeting institutions next week.

http://www.money.telegraph.co.uk/money/main.jhtml?menuId=243&menuItemId=2839&view=&grid=M3&targetRule=1&_DARGS=/money/Menu/SideMenuItemsFrag.jhtml.1_A&_DAV=-1

whats with all the notices?
me thinks there are anumber of stake builders in the frame!

On a bad day for the markets Goldmans sachs up thier holdings to 25.586m shares and then at 6.20pm on a friday evening the market is told Polygon fund have purchased 35m shares or 5.4% of BGY equity rather then buying its debts all bodes well for the long term future of british energy imho,coupled this with institutional presentations next week and the rumours about lunch dates with employies of Deutsche bank on thursday it all makes it all for very interesting the next few months.

There could be fireworks on Monday.
BGY are outperforming the market, lots of AT trades, no weakness even on bad days, all bodes well..... Sue Helen do you think you came out too early??

Hi transco, I sold my holding at 15.5 pence few months ago having bought them at 7.70 pence and I traded them a few times as well couple of months ago which I mentioned about on this thread at that moment in time. I won't be buying back in at these prices.

Released today :

British Energy under pressure to re-negotiate rescue terms with banks - report

LONDON (AFX) - British Energy PLC, the beleaguered nuclear electricity
generator, is under pressure from a leading shareholder to renegotiate rescue
terms signed last year with creditors, the Sunday Times reported.
The paper said hedge fund Polygon, which owns 5.6 pct of the stock, is
leading a campaign to force the company to ditch the plan and improve the terms
for shareholders.
The Sunday Times said while Polygon, which has secured the backing of
Invesco Perpetual -- the fund manager which owns a further 6 pct stake -- is
proposing bondholders are paid in full, shareholders would retain a 30 pct
stake.
The hedge fund is reportedly claiming the plan fails to recognise that
wholesale electricity prices have risen sharply since the agreement was reached
with creditors last October, thereby boosting the company's value.
However, a spokesman for British Energy pointed out that it had already
signed a binding agreement.
It said had it not done that deal at that time "the company would have faced
administration and shareholders would have had the likelihood of no return at
all".
British Energy, which supplies around 20 pct of the UK electricity market --
worth around 15 bln stg per year -- last November agreed a government-backed
rescue package which will see bondholders grabbing hold of 97.5 pct of its share
capital.
The company last month warned it still faces major hurdles if it is to stave
off bankruptcy despite returning to the black last year, a year after posting
one of the biggest losses in British corporate history.
Among those hurdles is the need for European Union approval of the rescue
plan which is being partially funded by the UK government.
rob.branch@afxnews.com

Hi Sue,

But do you wear the yellow because you are too scared to stay in.
I just dont see any downside personaly. Your decision to jump ship
looks a bit hasty and dare I say it a knee jerk reaction to press
comment! Great initial pick though it was.

If anyone wants to see the full Polygon press release you will find it at: http://www.polygoninv.com/

It includes a contact:

Tom Hampson,
+44(0)20 7153 1522/+44(0)7974 228852,
hampson@mcomgroup.com

where you can register your feedback on the Polygon proposals.

Hi transco, my reasons for not buying back in at these prices are stated in the newspaper article in the Guardian Newspaper today (see below and specially the statements from British Energy) : It could go either way from these prices. From when I intially bought in at 7.70 pence the price was only going to go up, now the risk/reward balance is different. I hope you understand all the different scenarios that I have posted about since the start of this thread.

Investors oppose BE rescue plan

Terry Macalister
Monday July 26, 2004
The Guardian

Government hopes of getting an easy ride over the restructuring of British Energy (BE) have been thrown into chaos with rebel shareholders agitating to throw out last year's restructuring plan.
With the European commission still to give the green light to last year's rescue plan, a hedge fund called Polygon and long-term BE investor Invesco Perpetual are together trying to unwind the October deal.

The two equity holders, with more than 11% of the nuclear generator, want to buyout bondholders with a cash offer of up to 800m and seize back 30% of the company.

The hedge fund said yesterday it was pressing to bring more shareholders on board and would vote against the BE proposals if there is any meeting to discuss delisting the group from the stock market.

There are also signs that the rebels are willing to try to turn the issue into a political case by arguing that the government stands to effectively win 65% control of future earnings while 230,000 small shareholders lose out with a tiny 2.5% of the new equity.

The dissident shareholders are aware that the government changed its mind over Rail track and eventually moved to offer them compensation.

But BE argues that it cannot unwind a binding restructuring plan that saved the firm from going into administration as wholesale power prices had collapsed.

Since this time wholesale electricity prices have increased dramatically but sources close to BE said trying to throw out an agreement signed in October when things were different was like "trying to bet on the Grand National while the race was already in progress".

The company will have to call an extraordinary general meeting for shareholders to formally agree its restructuring. This is expected once - and if - it gets the go ahead from Brussels.

That gives the opportunity for shareholders such as Polygon to vote against the board's proposals although BE has warned it will take the company off the stock market if it faces opposition to its plans.

Opponents say this loophole - whereby companies can delist without shareholder approval - will be closed in 2005 but BE seems prepared to take this action before such legislation is introduced.

http://www.guardian.co.uk/business/story/0,3604,1268991,00.html

"trying to bet on the grand national while the race was already in progress" i think the bookie's call it betting in running happens every day has done for a number of years lol

The price continues to rise with a 13.00% gain today and the price closing at 19.50 pence. I didn't think the price would have had legs to get to 20 pence.

Yes Sue I think you jumped ship far too early.
If shareholders win the day and lecy prices stay high
we could see far more gains. Jump back on while there is still time!

Hi transco, I have had a 250% gain already from these and I am very happy with that during the last three months and the risk reward ratio which I look at in my stock selections is just too great even for myself at these prices. I will wait until BGY agrees to re-negotiate the shareholder terms and then have another look in terms of recommending these to buy...I still day trade these sometimes but the risk is just too high for myself to recommend them here..otherwise what will happen is that even though I have mentioned several times about the risks involved I will get a torrid time by posters who may lose out if the price collapses back to 6.00 pence. You have to look on the other side of the coin as well that they have signed a binding agreement which means if the terms are not re-negotiated the price could fall to 5.00-6.00 pence or as they have commented several times the stock can also be delisted without shareholders approval.

Happy trading!

just bailed out at 19.25 after buying at 7.3 in my isa.....will continue to trade though....

also bailed out at 19.25. I will only trades this on big deeps from now. good luck to all.

Press Mention : will appear in the Times Newspaper tomorrow. The price will most likely rise again tomorrow on back of the below snippet :

Evidence of growing opposition from shareholders to the proposed restructuring of British Energy, which will leave them with 2.5 per cent of the equity, helped the nuclear generator up 2p to 19p.

http://business.timesonline.co.uk/article/0,,8211-1193464,00.html

Article in Monday's edition of the Independent :

Rebel investors attack British Energy rescue
By Stephen Foley
26 July 2004


Rebel investors have launched a campaign to scrap the proposed 5bn rescue deal at British Energy, the nuclear power generator, which would leave shareholders owning just 2.5 per cent of the company.

Polygon Investments, a UK hedge fund owning 5.6 per cent of British Energy shares, says the restructuring is "worse than a mugging" for shareholders, and is offering to underwrite a new refinancing deal.

Polygon's proposals were initially given short shrift by British Energy, but over the weekend a big institutional shareholder - Invesco, with 6 per cent - indicated its willingness to support a refinancing and Polygon urged other investors to join its campaign.

British Energy was insisting yesterday that the rebel shareholders' plan was a non-starter. "We had to sign binding agreements with creditors last October," the company said in a statement. "We now have an obligation to implement that agreement." The company is furious at the idea that shareholders who refused to refinance the company when it fell into difficulties in 2002 are now hoping to claw back some of the value they have lost.

Under current plans, shareholders will be left with a maximum of 2.5 per cent of a refinanced British Energy, with the Government holding a majority stake and bondholders taking up to 33 per cent. Since the deal, a revival in wholesale electricity prices has improved British Energy's fortunes. As a result, the company's equity is more attractive and its bonds, which will be swapped for shares, are trading at an 80 per cent premium to their face value.

The refinancing hammered out with the Government and bondholders says that the company will be delisted from the stock market if shareholders do not approve the deal. Polygon is claiming that a stock market rule change, which comes into force this year and which requires companies to get shareholder approval before delisting, means that British Energy could not delist. If the rule change comes in time, Polygon says it will vote against the deal, but it is also hoping shareholders will put pressure on the Government to renegotiate.

One Polygon insider said: "The creditors have carried out more than a mugging, nicking this company off 230,000 private shareholders and some grown-up institutions. No alternative is a non-starter when the Government is going to end up owning 65 per cent of the company."

British Energy said: "Without an agreement in October, we would have faced administration and shareholders the likelihood of no return at all. What they are getting under the proposals is more than shareholders have got in recent similar situations."

http://news.independent.co.uk/business/news/story.jsp?story=544741

Press Release: July 25, 2004

London

BRITISH ENERGY: POTENTIAL RESTRUCTURING IN FAVOUR OF SHAREHOLDERS

SUMMARY

Polygon Investments - a UK investment firm - announces that it has 5.6% of the voting rights of British Energy (the Company) and intends to vote against the Proposed Restructuring of the Company (as defined in the British Energy press release of October 2003), provided shareholders receive a vote in any proposed delisting request of the Company.

Polygon made an approach to the Company in June of this year with a revised restructuring proposal (the Revised Proposal) that would be capable of providing additional value to current shareholders. The approach was rejected.

Polygon now intends to canvas other shareholders to seek their support.

HIGHLIGHTS OF THE POLYGON REVISED PROPOSAL

The UK Government would receive the same terms and economics as under the Proposed Restructuring

The Eggborough banks would receive a small amount of additional cash in addition to their existing entitlement under the Proposed Restructuring

Current bondholders would be paid out in full

A claw-back of value would be received from certain Power Purchase Agreement (PPA) counterparties currently treated as creditors

Shareholders would receive equity equal to approximately 30% of the new company after the injection of the necessary additional capital

Polygon is confident that the Revised Proposal would result in a major benefit to shareholders, a very high proportion of whom are retail investors who, according to company filings, number some 230,000 people who probably control more than 40% of the stock, and whose interests are not being served fairly by the existing schemes on offer.

LEGAL OBJECTIONS TO THE EXISTING RESTRUCTURING PROPOSALS

Polygon is exploring whether the Proposed Restructuring violates fundamental rights of shareholders under European Community Law. In this regard, we intend to lobby the European Union so that its approval of the state aid package is conditional on shareholders rights being respected.

Polygon is also considering whether the Proposed Restructuring amounts to expropriation without adequate compensation and is reviewing whether the UK Human Rights Act 1998 has been respected.

MEETING WITH BRITISH ENERGY

In early June, Polygon, in conjunction with its financial and legal advisors, approached the Company and its financial and legal advisors with the Revised Proposal that would be capable of delivering additional value to shareholders. Polygon was informed that the Company was not able to facilitate alternatives to the Proposed Restructuring due to legal commitments under the Creditor Restructuring Agreement (CRA). Polygon accepts the potential validity of this legal opinion.

However, since Polygons approach to the company, we have become aware that the FSA is strongly considering accelerating the implementation of certain elements of CP203 regarding delisting procedures. Polygon believes the FSA delisting rule change is the single most important factor in obtaining a more favourable outcome for British Energy shareholders. Provided that the FSA is able to affect the rule change prior to the attempted implementation of the Proposed Restructuring, the Company will have to obtain shareholder approval to proceed. Since, in our view, the Proposed Restructuring is manifestly unfair to shareholders, we would expect this to lead to its failure.

In our view, the Company would then be free to negotiate a more equitable settlement with its shareholders and creditors along the lines discussed above in the Revised Proposal.


THE EXISTING PROPOSALS AS THEY AFFECT ORDINARY SHAREHOLDERS

According to the Companys press release of October 1 2003:

If shareholders approve the Members Scheme (requiring a 75% vote), they will receive shares representing 2.5% (0.9% adjusted for the Governments 65% cash sweep) of NewCo share capital, plus warrants equivalent to 5% (1.7% adjusted).

If shareholders do not approve the Members Scheme, but pass the resolution required under the listing rules to approve the Disposal Route, then shareholders would not receive any shares but would receive warrants entitling them to subscribe for 5.0% (1.7% adjusted) of NewCos equity.

If shareholders do not vote in favour of the Members Scheme and shareholders approval in respect of the Disposal is not obtained, the Company will delist in order to complete the restructuring. Shareholders will receive no shares or warrants. In this scenario no shareholders vote at all is required.

Polygon, through its communications advisors, welcomes shareholders feedback to these proposals. Polygon intends to update the market as to its progress when appropriate.

-ENDS-

Enquiries to:

M: Communications

Media Enquiries: Tom Hampson +44(0) 20 7153 1522
+44(0) 7974 228 852
hampson@mcomgroup.com

Shareholder Enquiries: Gemma Knowles knowles@mcomgroup.com



NOTES TO EDITORS:

Background on Polygon

Polygon Investment Partners LLP (Polygon) is a global private investment firm based in London and New York. It is authorised and regulated by the Financial Services Authority. Polygon manages a multi-strategy investment fund and invests in a wide range of publicly traded securities. The firm currently has over $1.35 billion under management. www.polygoninv.com

UKLA CP203, May 2004

The UKLA made the following remarks:

7.2 In our consultation paper titled Review of the Listing Regime in October 2003 (CP203), we expressed the concern that the current regime does not provide adequate protection to minority shareholders, who may be forced to sell their shares at a price they consider to be unfairly low, or to hold unlisted securities. We therefore put forward a proposal to require shareholder approval before the cancellation of listing in order to provide adequate protection to minority shareholders.

7.7 Due to the overwhelming positive response from market participants in respect of this proposal, we have decided to accelerate the introduction of this rule ahead of the rules we will be introducing as a result of the review of the listing regime. We believe that the introduction of this requirement is important for the protection of minority shareholders who may be forced to hold securities which are fundamentally different from what they originally purchased.

7.8 We intend to follow the proposal in CP203 and introduce a requirement that, save where the UKLA otherwise agrees under rule 1.11, any issuer that wishes to cancel the listing of its shares or preference shares must obtain the prior approval of at least 75% of the total votes cast by its shareholders in a general meeting. This is in addition to the current requirements in the Listing Rules to notify a RIS and send a circular to the holders of those securities, giving at least 20 business days notice of the intended cancellation. The circular must be sent to the holders of the relevant securities at the same times as the notification to a RIS is made

Statement of Risk

Shareholders should note that there can be no guarantee that should the CRA terminate the company will be able to pursue the Revised Proposal or another proposal similar to it. It is a possibility that shareholders could end up with less than under the Proposed Restructuring if the CRA terminates.


--------------------------------------------------------------------------------
http://www.polygoninv.com/Press%20Releases.htm

The price was up again today to a high of 22-23 pence before closing around 20.75 pence. I woke up too late today so could not day trade these today. I feel the price may start to drift down from sometime tomorrow as the RSI is in a very heavy overbought postion and the price has got way above the Upper Bollinger Band (see below chart). If the price does start to drift down it will find support at 18.00-19.00 pence.

Sue - I take it that was not your 10.75m bought after the bell? ;

Nice to hear from you Chartist. There I was thinking it was yours, for a moment anyway.

Sorry Sue but I dont agree. With a Wall St recovery late on and further press
comment likely I dont see much downside from here.
10.75m after the bell is interesting too.
A lot of sellers came in this afternoon but were quickly swept up by more AT's.
Oil / energy prices jumping ever higher - at worst I guess consolidation at 20-21.
The only worry is the potential profit Poly and others are sitting on.

Re : my post yesterday, the price was down today and finished around 7.00% down to around 19.50 pence. The price is not fully inside the bollinger bands yet so the price may fall another 0.50-1.00 pence tomorrow. There is support for the price at 18.00 pence. The RSI is still in overbought territory.

Hi transco, my prediction yesterday evening was only for today. With regards to the trades that come through after the market closes :
The large trades are not dealt after hours, they are trades that took place during the day and were reported after hours.

These large deals do not happen immediately, the are dealt with bit by bit and when the overall deal is completed, then they are reported.

Because you don't know when they were executed, it is not easy to say whether they were buys or sells - judging by the day's price fluctuations. However, one thing is for sure, they will not affect tomorrow's price - they have already done that - today!

Business Telegraph 29 July 2004

British Energy shareholders need extra spark to jolt directors

Polygon plan rallies British Energy
For a business that is supposedly almost bust, shares in British Energy have shown an impressive performance recently. From a nominal tuppence ha'penny last October, they have climbed to a peak of 18.25p last night. Such stories are commonplace among penny stocks where dealing is difficult and the price prone to manipulation. British Energy, though, is not a small company. With sales of 2 billion, it is the source of a fifth of Britain's electricity, thanks to its array of nuclear power stations (hence its soubriquet here, of the company that dare not speak its name).

Last autumn, British Energy almost went under, as the price of wholesale electricity plunged to below its (fixed) cost of production. As part of the price of rescue, the Government stepped in with a stand-by loan, and the bond-holders effectively won control of the company.

Or almost. Conditions in the electricity market have changed out of all recognition since then, as prices have recovered dramatically. British Energy bonds - which are entitled to most of the equity in the reconstructed company - are now trading at a huge premium to their nominal value.

The old shareholders, who watched while their company was taken from them, still retain one potential trump card. The "rescue" needs their approval, and they are highly unlikely to give it, since if the scheme fails they would keep the company. The board could then refinance it on better terms.

Here's the rub. The directors, under chairman Adrian Montague, say they are bound to try to complete the rescue contract even though it is against the interests of shareholders today. This even extends to threatening to exploit a loophole in the Stock Exchange listing rules; if the share quotation is cancelled, the requirement for shareholder approval falls away.

This loophole is due to be closed, but it may be too late for the suffering shareholders in British Energy. At last, they are starting to organise themselves, and the rising volume of trades this week shows that all is not lost. Indeed, it would not take many more protests to oblige Mr Montague to change tack. After all, he is being paid by the shareholders to look after their best interests.

Times 29 July 2004

British Energy

BRITISH ENERGY shares have been climbing steadily on hopes that the companys restructuring can be scrapped in favour of a better deal for shareholders. Now Polygon, a hedge fund, has attacked the restructuring plan, calling it a second Railtrack that robs shareholders of their rights and hands 65 per cent of the group to the Government.

It is true that since power prices started rising at the tail end of last year the British Energy deal has looked particularly tough for shareholders, who will get just 2.5 per cent of a company that is valued at more than a 1 billion if you look at the way its bonds are trading. But without this agreement the company would have been in administration by now and shareholders would have a big fat zero.

Polygons 5.6 per cent stake has been cheaply and recently acquired. It took its stake above the notifiable 3 per cent only last week. The fund suggests that the Financial Services Authority will usher in new rules this autumn that will allow British Energy shareholders to vote on delisting the shares. But even if that happens in time, FSA insiders suggest that British Energy will be exempt.

As for the Government, it has never ruled out letting BE, the supplier of a fifth of Britains electricity, fall into administration. It would rather that happened than be seen to be bailing out shareholders. In that scenario, the chances of Polygon being around are nil. Dont be tempted by the Polygon bandwagon.

Goldman sachs have up their stake by 77 million shares since the last notice on 23rd July:

RNS Number:3487B
British Energy PLC
29 July 2004

29 July 2004



British Energy plc



UK COMPANIES ACT 1985 - SECTIONS 198-203 - British Energy plc (the "Company")



This notification relates to issued common stock of the Company ("shares") and
is given in fulfilment of the obligations imposed by sections 198 to 203 of the
Companies Act 1985 (the "Act").



The Company was notified that as at close of business on 26 July 2004, The
Goldman Sachs Group, Inc ("GS Inc") of 85 Broad Street, New York, NY 10004, USA,
was interested, by attribution only, in a total of 103,071,077 shares.



Of these 103,071,077 shares:



* The interest in 18,465,852 shares arose from the interest held by Goldman,
Sachs & Co. ("GS&Co."), a direct subsidiary of GS Inc, acting as custodian.
These shares are, or will be, registered in the name of Goldman Sachs
Securities (Nominees), Limited.



* The interest in 79,380,225 shares arose from the interest held by GS&Co,
acting as custodian of 1,058,403 American Depositary Receipts ("ADRs").
These ADRs are, or will be, held at the Depositary Trust Company of New York
("DTC").



* The interest in 5,225,000 shares arose from a beneficial interest held by
Goldman Sachs International, a direct subsidiary of GS Inc, these shares
are, or will be, registered at CREST in account CREPTEMP.

LONDON (AFX) - Uncertainty over the future of British Energy PLC intensified
today after US investment bank Goldman Sachs revealed it had bought a slug of
77.5 mln shares in the stricken nuclear electricity generator.
The purchase leaves Goldman holding 103 mln shares, or nearly 17 pct of the
total, all of which it appears to have bought in the past three weeks.
A Goldman Sachs spokesman told AFX News the shares had been bought on behalf
of a client. The investment house refused to give any other details.
A brief notification about the stake to the London Stock Exchange today
follows a weekend British press report which claimed the company was under
pressure from leading shareholders to renegotiate debt-for-equity-swap rescue
terms signed last year with creditors.
That press report said hedge fund Polygon, which last week upped its stake
to 5.6 pct, was leading a campaign to force the company to ditch the plan and
improve the terms for shareholders.
Under that government-backed plan agreed with creditors last October,
bondholders are set to take hold of 97.5 pct of the company's share capital.
The report said Polygon has also secured the backing of UK-based fund
manager Invesco Perpetual, which owns a further 6 pct stake, and is proposing
that while bondholders are paid in full, shareholders will retain a 30 pct
stake.
The hedge fund says the plan fails to recognise that wholesale electricity
prices have risen sharply since the agreement was signed, thereby boosting the
company's value.
Today, one source familiar with the situation said the US bank's client may
be trying to whip up sufficient votes to force the company to ditch its rescue
plan.
But he said the bank may equally be buying shares on behalf of creditors to
prevent Polygon from blocking the deal.
Meanwhile, a spokesman for British Energy pointed out that it has already
signed a binding agreement.
He said if it had not done that deal at that time "the company would have
faced administration and shareholders would have had the likelihood of no return
at all".
British Energy, which supplies around 20 pct of the UK electricity market,
which is worth around 15 bln stg per year, last month warned it still faces
major hurdles if it is to stave off bankruptcy a year after posting one of the
biggest losses in British corporate history.
That, despite recently announcing a return to profit.
Among those hurdles is the need for European Union approval of the rescue
plan which is being partially funded by the UK government.
At 2.05 pm British Energy shares -- which have risen by 22 pct over the past
week -- were trading 1.75 pence, or 8.3 pct down on the day at 19.25 valuing the
group at around 119 mln stg.
rob.branch@afxnews.com

Hmm, they are going to need more than 17% to block Polygon + private shareholders IMHO.

RNS Number:4671B
British Energy PLC
30 July 2004

30 July 2004
British Energy plc

NUCLEAR OUTPUT PROJECTION FOR 2004/05 FINANCIAL YEAR

Following evaluation of structural inspections carried out during the current
statutory outage at the Hartlepool power station and intensive discussions with
the Nuclear Installations Inspectorate, the company has decided that further
work to demonstrate the integrity of certain boilers is necessary. This work may
entail visual inspections of a number of boilers at Heysham 1 (one reactor is
shut down and the other is due to be shut down for its statutory outage in
August) and at Hartlepool (one reactor is currently shut down and there is no
impact on the operation of the other reactor).

The company has reviewed its annual nuclear output target previously announced
at 64.5TWh. The company believes that in the light of the new issues at
Hartlepool and Heysham 1 it is prudent to revise the nuclear output target for
the 2004/05 financial year to around 61.5TWh.

A further update on the matter will be given at the time of the company's annual
general meeting on 5th August 2004.

British Energy's Proposed Restructuring remains subject to a large number of
significant uncertainties and important conditions, including receipt by the
Secretary of State for Trade and Industry (the 'Secretary of State') of a
satisfactory notification from the European Commission that in so far as the
proposals involve the grant of State Aid by the UK Government, such aid is
compatible with the common market. The Secretary of State expects to receive
this notification by autumn 2004. Furthermore, the Secretary of State is
entitled not to proceed with the Proposed 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.

If for any reason British Energy is unable to implement the Proposed
Restructuring 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
British Energy 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 that there would be any return to
shareholders. Even if the Proposed Restructuring is completed, the return, if
any, for shareholders will represent a very significant dilution of their
existing interests.

This document contains certain "forward-looking" statements as defined in
Section 21E of the US Securities Exchange Act of 1934, including statements with
respect to British Energy's business plans, the performance of its stations,
electricity prices and other matters that are not historical facts concerning
the business operations, financial condition and results of operations of
British Energy. These forward-looking statements typically contain words such as
"intends", "expects", "anticipates", "estimates", "aim", "believe", "assume",
"should" and words of similar import, which are predictions of or indicate
future events or future trends. These forward-looking statements involve known
and unknown risks, uncertainties and other factors, which are in some cases
beyond the control of British Energy and may cause actual results or performance
to differ materially from those expressed or implied from such forward-looking
statements.


Contacts:
Andrew Dowler Financial Dynamics, Media 020 7831 3113
Paul Heward British Energy 01355 262 201
Website: www.british-energy.com


This information is provided by RNS
The company news service from the London Stock Exchange
END

MSCQBLFXZDBLBBE

Cater Allen International Limited have less than a 3% stake now :

RNS Number:4777B
British Energy PLC
30 July 2004

30 July 2004

British Energy plc


Notification of Interest in Shares pursuant to Part VI of the Companies Act 1985
(as amended) from Cater Allen.

In accordance with Part VI of the Companies Act 1985 (as amended), please note
that as of 21 July 2004, Cater Allen International Limited (CAIL) no longer has
a reportable interest in the ordinary shares of British Energy Plc.



This information is provided by RNS
The company news service from the London Stock Exchange
END

HOLBRGDRDSXGGSG

Error in one of the previous RNS relating to Goldman Sachs, they have an interest in only 31 million shares and not around 103 million shares as stated in one of the RNS's during the week :


RNS Number:4775B
British Energy PLC
30 July 2004

30 July 2004

British Energy plc

UK COMPANIES ACT 1985 - SECTIONS 198-203 - British Energy plc (the "Company")

NOTICE TO BRITISH ENERGY FROM GOLDMAN SACHS GROUP INC

This notification relates to issued common stock of the Company ("shares") and
is given in fulfilment of the obligations imposed by sections 198 to 203 of the
Companies Act 1985 (the "Act").

It has come to our attention that, as a result of erroneous information provided
to us by a third party, the notification provided on 28 July for the close of
business 26 July was incorrect and that no disclosure by The Goldman Sachs
Group, Inc to you was necessary at that time.

We hereby notify you that as at close of business on 29 July 2004, The Goldman
Sachs Group, Inc ("GS Inc") of 85 Broad Street, New York, NY 10004, USA, was
interested, by attribution only, in a total of 31,078,577 shares.

Of these 31,078,577 shares:

The interest in 21,465,852 shares arose from Goldman, Sachs &: Co.
("GS&Co."), a wholly-owned direct subsidiary of GS Inc, acting as
custodian. These shares are, or will be, registered in the name of Goldman
Sachs Securities (Nominees), Limited.

The interest in 4,380,225 shares arose from GS&Co. acting as custodian of
58,403 American Depositary Receipts (" ADRs"). These ADRs are, or will be,
held at the Depositary Trust Company of New York ("DTC").

The interest in 7,500 shares is a beneficial interest by GS&Co. in 100
ADRs. These ADRs are, or will be, held at the DTC.

The interest in 5,225,000 shares is a beneficial interest held by Goldman
Sachs International, a wholly-owned indirect subsidiary of GS Inc. These
shares are, or will be, registered at CREST in account CREPTEMP.


This information is provided by RNS
The company news service from the London Stock Exchange
END
HOLBRGDRBSXGGSG



BR.Energy(BGY) Click for Fundamentals
Name Symbol Market Type ISIN Description
BR.Energy LSE:BGY London Stock Exchange Equity GB0007382939 ORD 44 28/43P





Sector Turnover (m) Profit (m) EPS - Basic PE ratio Mkt Cap (m) NMS
Electricity 1516.0 232.0 38.9 0.572 138.03 100000

LONDOn (AFX) - British Energy PLC said erroneous information provided by an
unnamed third party led to an incorrect statement being issued regarding Goldman
Sachs's holding in the company.
"It has come to our attention that, as a result of erroneous information
provided to us by a third party, the notification provided on 28 July for the
close of business July 26 was incorrect and that no disclosure by the Goldman
Sachs Group, Inc to you was necessary at that time," said British Energy.
At the close of business yesterday, the Goldman Sachs Group, Inc was
interested, by attribution only, in a total of 31,078,577 shares, as opposed to
103 mln shares as was revealed yesterday.
Yesterday, a Goldman Sachs spokesman told AFX News the shares had been
bought on behalf of a client. The investment house refused to give any other
details.

In today's Daily Telegraph Newspaper :

Brit Energy issues correction
By Tessa Thorniley (Filed: 31/07/2004)


The developing saga at British Energy took a surprise twist yesterday after Goldman Sachs, the American investment bank, was forced to retract a stock market announcement that had falsely claimed it had acquired a 15.8pc stake in the troubled nuclear power group on behalf of a mystery client.



A statement from British Energy to the City last night said: "Erroneous information provided by an unnamed third party led to an incorrect statement being issued regarding Goldman Sachs' holding in the company."

Although Goldmans declared an interest in 103m British Energy shares on Thursday, the bank has since corrected the earlier announcement and claims now to hold just 31m shares - around a 5pc stake - on behalf of unnamed clients and itself.

Previously a Goldman Sachs spokesman had said the shares had been bought on behalf of a client, but had refused to give further details.

The move is expected to prompt inquiries by the Financial Services Authority, the City watchdog. A spokesman for British Energy yesterday said he was unable to comment.

British Energy shares, which have been buoyed this week after a British hedge fund, Polygon, built up a 5.6pc stake in the company, climbed to a new high for the year, closing up 2.75p to 22.25p.

Polygon, which has teamed up with Invesco Perpetual, plans to use their 11.6pc stake to block British Energy's proposed restructuring package that would leave shareholders owning just 2.5pc of the company.

http://www.telegraph.co.uk/money/main.jhtml;sessionid=KOHST5NJPGAKVQFIQMGSM54AVCBQWJVC?xml=/money/2004/07/31/cnbrit31.xml&menuId=242&sSheet=/money/2004/07/31/ixcity.html&menuId=242&_requestid=85919

Polygon, the secretive hedge fund which is fighting for a better deal for British Energy shareholders under the company's proposed financial restructuring, will invoke European human rights legislation if the energy giant does not reconsider its plans.

Polygon's legal advisers believe that British Energy could be guilty of improper confiscation of private property if it presses ahead with a rescue package. The package would give bondholders 97.5 per cent of the company through a debt-for-equity swap.

One executive close to Polygon said: "There are a number of legal avenues open to us, and using human rights legislation is one of them."

British Energy was plunged into financial crisis in 2002 after falling wholesale energy prices left its power stations losing 5m a week.

Shares in the company, which generates a fifth of the UK's electricity, have more than doubled since May to 21.63p on hopes that the restructuring might be revised in favour of shareholders.

Polygon, which holds a 5.6 per cent stake, and Invesco, which owns 6 per cent, have proposed a revised rescue package which would hand back 30 per cent of the new company to shareholders.

As part of the deal bondholders would receive 750m.

But Adrian Montague, the chairman of British Energy, will point out at the annual meeting on Thursday that shareholder approval is not legally required for the restructuring to take place.

The British Energy board is prepared to delist the company if investors do not back the proposed financial re-engineering.

If shareholders do not give their support at a vote to take place this autumn, they will end up with nothing, Montague will say.

Analysts believe the true value of British Energy shares, post restructuring, is about 10p to 12p.

On Friday, Goldman Sachs, the US investment bank, was forced to retract a stock market statement that it had acquired a 15.8 per cent stake in British Energy on behalf of a mystery client.

It gave no explanation for the mistake, and cited "erroneous information".

The European Commission is currently reviewing whether a 5bn bailout of British Energy by the Government breached state aid rules.

It is expected to approve the deal in a formal ruling later this year.

29 July 2004: Polygon plan rallies British Energy
27 July 2004: Court challenge to Brit Energy rescue

Lots of developments this week.

AFX release today :

LONDON (AFX) - Polygon, a hedge fund which has built up a 5.6 pct stake in
British Energy PLC, is set to threaten further legal action against the nuclear
generator this week, The Independent on Sunday reported.
Citing sources close to the fund, The Independent said the hedge fund could
take British Energy to court if its management denies shareholders a better
deal.
Under the proposed restructuring, British Energy shareholders could be left
with 2.5 pct of the equity, with the rest going to bondholders and other
creditors.
Polygon intends to seek further shareholder support at the company's annual
general meeting this week.
"There are clearly legal elements to our strategy. It would be stupid not to
try to strengthen our hand at the AGM. But we want to work with management if we
can," the source was quoted by The Independent.
British Energy supplies around 20 pct of the UK electricity market, which is
worth around 15 bln stg per year. Last month the company warned it still faces
major hurdles if it is to stave off bankruptcy a year after posting one of the
biggest losses in British corporate history.
etain.lavelle@afxnews.com

Today's Sunday Times Newspaper :

August 01, 2004

British Energy bondholders warn investors to back off
Richard Fletcher and Lucinda Kemeny



BONDHOLDERS in British Energy (BE), the struggling nuclear generator, have warned shareholders: block the restructuring and you will get nothing.
Last week Polygon, an American hedge fund with a 5.6% stake in the company, launched a public assault on the restructuring plan after its approach to the board of BE was rejected.



Backed by Invesco Perpetual, an institutional investor with a 6% holding, Polygon hoped BE would reconsider the October 2003 agreement that will leave shareholders with just a 2.5% stake when refinancing is ratified by the European Commission later this year.

But an adviser to an ad-hoc committee of bondholders warned that the actions of the hedge funds threatened shareholders’ hopes of getting anything at all.

“The activities of one or two hedge funds could risk the deal for retail shareholders. If shareholders say ‘no’, the company will still be restructured but the banks and bondholders will take the equity that would have been allotted to shareholders,” he warned.

Bondholders stressed that under the terms of the refinancing deal BE could simply be delisted and then restructured without shareholder consent.

The row at BE is the latest in a number of battles between shareholders and bondholders.

Polygon hopes it can exploit an expected change to stock-market rules which will prevent delisting without a shareholder vote.

The change was not due to come into effect until next year, but it has been brought forward and Polygon wants to capitalise on this.

An adviser insisted the agreement was legally binding and the bondholders, such as RAB Capital, had compromised their claims to keep the generator out of receivership.

“In any normal deal the new bonds and equity would have been released by now,” he said. “It is only because the European Commission process is so elongated that a gap in timing has opened up between the deal being done and the new instruments being issued.”

He said this had allowed speculators in the stock to come in and give small investors false hopes about the future.

Without a renegotiation, analysts believe BE’s shares are worth just 8p, rather than the 22p closing price on Friday.


-----This last paragraph is what I have tried to re-iterate.

Sue Helen

Interesting that you started this thread, I don't think anything has changed since then, (apart from the SP), so why now playing it safe, afterall it has always been and still is a huge gamble. Personally, I can't complain, your initial posting prompted my own buy, (sold last week at 20p), resulting in a 150% profit, so many thanks for that.

Regards

PTH

Hi ptholden...I'm only trying to make it clear as to what the situation is regards to the restructuring. This is because many posters have posted on this thread asking me to provide my views and to keep them updated on developments. Its so that I can answer any questions that posters provide in one go rather than having to answer each request individually.
In addition, if the share price did fall, I don't have to brunt the responsibility which is becoming a common thing on the threads. At this moment, many traders will have a cautious stance hence my cautious stance on these(price is 22 pence now and look where it has risen from (my thread was started at 7.70 pence to buy, you have to take that into account) as I doubt anyone can predict exactly what will happen. One just has to look at the variations in the different press comments during the past week.

I do have a cautious stance for tomorrow and I think the share price may retreat : Two reasons

1. Goldman Sachs RNS after market close on Friday stating that they have not bought the 70 million shares which everyone was led to believe during the week.
They only have an interest in approximately 31 million shares

2. The Times article today.

Polygon have now opened a campaign website "BE-fair" http://www.be-fair.org/

Shareholders can sign an online petition and make themselves known

Recovered some of its losses today having been down over 15.00% in the morning to finish 5.6% down.

Released today :

LONDON (AFX) - British Energy bondholders yesterday told the Financial Times
that shareholders stand little chance of re-negotiating the company's
government-backed rescue plan.
A spokesman for the group of creditors told the paper that hedge fund
Polygon was "picking at mirages" and echoed the company's warning that
shareholders will receive nothing if they fail to back the deal negotiated last
October.
He was speaking after Polygon, which has built up a 5.6 pct stake in the
stricken nuclear generator, reportedly threatened to take legal action this week
to try to secure better terms for shareholders.
Under the proposed restructuring, British Energy shareholders could be left
with just 2.5 pct of the equity, with the rest going to bondholders and other
creditors.
Polygon, which is understood to have secured the backing of Invesco
Perpetual, the UK-based fund manager which owns a further 6 pct stake, intends
to seek further shareholder support at the company's annual general meeting this
week.
It says the rescue plan fails to recognise that wholesale electricity prices
have risen sharply since the agreement was signed, thereby boosting the
company's value.
But British Energy, which supplies around 20 pct of the UK electricity
market, which is worth around 15 bln stg per year, says if it had not done the
deal at that time it would have been forced into administration and shareholders
would most likely have received no return at all.
Last month the company warned it still faces major hurdles if it is to stave
off bankruptcy a year after posting one of the biggest losses in British
corporate history.
rob.branch@afxnews.com

Re : my post last week about the price being outside the upper bollinger band, well the price is right on cue with the upper bollinger band (see below chart). I would expect the price to be blue tomorrow rising in line with the upper bollinger band subject to no news releases.

In my view some compromise will come out of this mess.
If they want shareholders to vote in favour of the bondholders
they must offer slightly better terms. Interesting situation
for speculators and watchers. What say you Sue? fountain of all knowlege?

clips of the interviews Reade Griffiths of Polygon did today on BBC News-24, Radio 5 live and Radio 4 can be found at:http://www.be-fair.org/interviews.asp

The Torment of British Energy
AFX/MoneyAM
Shareholders in British Energy PLC should stop "tormenting" themselves by trying to re-open a "binding" rescue deal in order to win better terms for themselves, Adrian Montague, group chairman, says in a letter in today's Financial Times.

Polygon Investments, a hedge fund that owns a 5.6% stake in the power company, is seeking to improve the terms of the government-backed rescue that would leave existing shareholders owning just 2.5% of the company with options to acquire another 5%. It will press for 30% of the restructured group to be retained by shareholders, at the group's annual meeting tomorrow. Creditors would be paid no more than what they are owed.

British Energy bonds have been trading at about 170, well above their par value of 100. Polygon said this reflected the good deal won by creditors, who will own the bulk of the company under a debt-for-equity swap.

Montague, in the letter to the FT, accepted that power prices had "increased substantially" since the rescue was negotiated but says: "No one contests that there was at the time any alternative to the deal we did. I very much regret the substantial dilution our shareholders will suffer under the deal but the company has survived and they (British Energy shareholders) stand to retain an interest that bears comparison with the position of shareholders in other, similarly reconstructed companies in the London market.

"The deal is binding on British Energy and we are duty-bound to do all we can to give full effect to it. It is not open to the company to change its mind now. There's no advantage in tormenting ourselves by speculating what the outcome might be if we were free to start afresh," he said in the letter.

Press mention : in Today's Daily Telegraph

Energy board sweeps aside protests
By Tessa Thorniley (Filed: 06/08/2004)


Shareholders in British Energy failed to move their board yesterday at an acrimonious annual meeting that was overshadowed by the plans for the bondholders to take control of the company.



Before the Edinburgh meeting, David Gilchrist, managing director of nuclear generation, had announced his sudden departure after 13 years "to seek new challenges". He had been due to become technical director.

Adrian Montague, chairman of Britain's nuclear generator, was accused of using "unreasonable" measures to push through the proposed Government-backed rescue that will leave investors owning just 2.5pc of the shares.

Private shareholders also complained about the extra 150,000 a year Mr Montague is receiving until the restructuring is completed or the binding agreement for the restructuring scheme ends. On completion he stands to receive a further 100,000.

Reade Griffiths of Polygon, the hedge fund which holds 5.6pc of British Energy, told the board: "Not a lot of people here are happy with the deal. The board, I know, has signed binding agreements with its creditors to pursue all reasonable endeavours to ensure the restructuring succeeds. But what is reasonable?"

The directors have indicated that if the shareholders do not approve the scheme, they will cancel the Stock Exchange listing to allow it to proceed, a move that would wipe out their stake in the restructured company.

However, Polygon told the 50-strong group of shareholders assembled at the meeting that the company has a "window of opportunity" at the end of January 2005, when standstill agreements with its senior creditors end, to renegotiate a better deal for investors.

Mr Montague replied: "However enchanting the tune from the bush, we have to assume a bird in the hand is worth two in the bush. If the restructuring is terminated and there is no recapitalisation - such as Polygon has suggested - the company will go into administration."

One private shareholder pointed out that he held "four times the number of shares" held by the entire British Energy board. "It might make the board more than just sympathetic if more than three of them actually held shares," he said.

On current trading, Mr Montague said, "I cannot tell you for certain that everything will go smoothly in the coming months." Last week the group, which supplies Britain with 20pc of its electricity, cut its output target for the current year by over 4pc.

Protests outside included disgruntled shareholders with placards reading "Shareholders want a deal not a steal" and environmental campaigners against the nuclear industry. British Energy shares fell 2 to 19p.

http://www.money.telegraph.co.uk/money/main.jhtml?xml=/money/2004/08/06/cnener06.xml&menuId=242&sSheet=/money/2004/08/06/ixfrontcity.html

Press mention : will appear in tomorrow's Independent Newspaper.

And finally, there was evidence of yet more stake building in British Energy, up 0.75p to 19.25p. No, it was not from Polygon, the vocal anti-restructuring hedge fund, which controls 5.8 per cent of the electricity generator. A Mr Brian J Stark disclosed that he had upped his stake in BE to 37.8 million shares, or 5.9 per cent. In a statement to the Stock Exchange, Mr Stark gave his office address as Wisconsin, USA, but disclosed that the bulk of his holding is controlled by Shepherd Investments, a British Virgin Islands registered vehicle.

Whether, like Polygon, Mr Stark is against the restructuring was unclear yesterday but, should he emerge as so, it would mean that about 23 per cent of the company is controlled by shareholders who oppose the debt-for-equity swap. That is Polygon's 5.6 per cent, Invesco's 6 per cent, whoever is behind the 5 per cent registered in the name of Goldman Sachs and Mr Stark's 5.9 per cent. British Energy, however, is unperturbed by this. It says hedge funds are welcome to build as big a stake as they like in the company but warned that opposition to the restructuring is futile. BE says it will push through with the debt swap with or without shareholder support.

http://news.independent.co.uk/business/analysis_and_features/story.jsp?story=548750

Press mention : will appear in tomorrow's Times Newspaper.

August 07, 2004

Tempus

Price rises can do British Energy a power of good
By Angela Jameson



THE era of cheap energy is over, at least for now. Or so said Adrian Montague, British Energy’s chairman, earlier this week. On that, at least, he and the rebel investors in the troubled nuclear group agree.
Last October British Energy’s bondholders grumbled that shareholders in the near-bankrupt nuclear group had won too much from the Government-backed restructuring plan. Ten months later the shareholders are incensed, saying that bondholders are getting control of the company on the cheap. What has changed in that time? The simple answer is that wholesale power prices have almost doubled and look set to go further. Ofwat, the water regulator, yesterday said that it was factoring a 30 per cent increase in power costs in the next two years into its model for setting price limits. That figure was based on data from Oxera, the economic consultancy, which told water companies in January that prices could increase by 22 per cent to 47 per cent in the near term.



One consequence of these considerable increases is that interest in buying British power stations has revived, with large suppliers such as Scottish and Southern Energy, Centrica and ScottishPower trying to buy more generation capacity to lessen their exposure to volatile price movements. Last week Scottish and Southern bought two of the largest coal-fired power stations in the UK, Ferrybridge in Yorkshire and Fiddler’s Ferry in Cheshire, from the burned US investor AEP in a 250 million deal. Together, the two plants had cost 1.9 billion in 1999.

But the deal was not as straightforward as it seems. Scottish and Southern paid only 136 million cash to buy the plants and 1.6 million tonnes of coal stocks. A further 115 million was paid for “fuel in transit and contracts to supply fuel to power stations”. That means that Scottish and Southern was paying only 76 million for the power stations. The real value of the deal was in the coal.

Coal prices have almost doubled in the past year and analysts in ING, the investment bank, expect them to have risen from €4 (2.64) a megawatt hour to €8 by 2005. Huge demand for coal from China is driving this wild increase.

China emerged only recently on the world scene as a significant coal exporter, driving prices low. Now its own rapacious consumption of the black stuff has tipped the balance and it is back to being a net importer. China’s huge appetite for energy, metals and agricultural products, has tied up nearly all the world’s dry bulk ships and caused blockages in South African and Australian ports. That is why it was such a good deal for Scottish and Southern to buy these two plants — even though the assets do not have much life left in them.

Rising wholesale power prices do not, however, increase the chances that the Drax power station in Yorkshire, Europe’s biggest coal-fired plant, may be sold. Drax renegotiated its 1.2 billion debt last autumn after shunning a sale to International Power, in anticipation that power prices would start to rise. But the giant power station’s hunger for coal still makes its future look bleak, although it has started co-firing wood, which allows it to pick up a renewable subsidy.

Indeed, rising wholesale power prices are not that helpful for electricity suppliers, as was evident from Centrica’s interim results two weeks ago. Few integrated suppliers and generators have enough generation to cover their own customers’ needs and most still need to turn to the market. Small margin increases can sometimes be achieved, but that is not occurring at the moment because spark spreads — the difference between the cost of fuel and the cost of power — have remained constant.

That is why British Energy’s shareholders are right to point out that the nuclear company is one of the best placed to benefit from rising coal and gas prices. Nuclear generators, hydroelectric generators and wind farms will be the main beneficiaries of continuing high power prices. Those include Scottish and Southern, British Energy and ScottishPower, which is the farthest down the wind farm route of all the UK generators.


http://www.timesonline.co.uk/article/0,,748-1206147,00.html

Released today :

LONDON (AFX) - Troubled nuclear electricity generator British Energy PLC
said it has been informed that US investor Brian Stark has bought further shares
in the company, bringing his total holding to 42.84 mln shares.
On Friday, the group said Stark had raised his stake to 37.84 mln shares
from 32.84 mln.
The shares are held by investment companies controlled at least one-third by
Stark, the group said.
newsdesk@afxnews.com
cw

Press mention : will appear in tomorrow's Times Newspaper : not so favourable comments.

August 10, 2004

Invesco tempers support for challenge on British Energy
By Angela Jameson, Industrial Correspondent



INVESCO PERPETUAL, one of Britains leading investment groups, is understood to have moderated its support for Polygon, the rebel shareholder that is pressing for British Energys restructuring plan to be torn up.
Polygon is considering a legal challenge to the restructuring plan agreed last October and has appointed Shearman & Sterling, the US law firm, to assess the options.



But sources told The Times last night that Invescos name would not be added to any legal challenge to the nuclear group or its directors, who include Adrian Montague, British Energys chairman.

The investment funds change of heart has arisen because, as a bondholder, it has conflicting interests in the companys future.

Invesco, as a bondholder, would also have signed up to the companys restructuring plan when it was agreed by British Energy, creditors and the Government last October.

The funds backing for Polygon had added credibility to the unknown hedge funds argument that shareholders deserved a better deal from the debt-for-equity restructuring plan. Together, the two funds had controlled 11 per cent of the shares.

Polygon, which only recently accumulated its 5.6 per cent stake in British Energy, contends that rising wholesale power prices enhance British Energys prospects and that the restructuring deal, which will hand 35 per cent of the company to bondholders, leaving existing shareholders with just 2.5 per cent, is unfair.

British Energy has said that it is legally obliged to go through with the plan and has said that it will delist the shares to make sure the restructuring takes place.

Neil Woodford, a fund manager for Invesco, would not comment.

LIVE WIRE

Brian Stark, a hedge fund manager from Wisconsin, could be the key to the battle for control of Britains nuclear generator.


It emerged yesterday that Mr Stark has built a 7 per cent holding. He has not contacted the Polygon side and could yet emerge as a bondholder, aiming to thwart Polygons efforts to overturn the restructuring plan.

http://business.timesonline.co.uk/article/0,,8209-1209890,00.html

Press mention : will appear in tomorrow's Daily Mail Newspaper.

British Energy, down 1/4p at 19p with the A shares off 1/4p at 15 1/2p, continues to see a build-up in its ordinary shares by American investors confident they can obtain better terms from the company over its proposed refinancing.


US financier Brian Stark bought an extra 5m shares on Friday, stretching his total holding to 42.8m, or almost 7%.


Chairman Adrian Montagu said last week that British Energy had made considerable progress in agreeing its restructuring proposals. But shareholders such as Stark, US securities house Goldman Sachs and hedge fund Polygon reckon the terms are weighed too heavily in favour of the bondholders.

http://www.thisismoney.com/20040809/nm81219.html

Interesting !!!

British Energy rebels gun for Montague
By Andrew Murray-Watson (Filed: 08/08/2004)


Rebel shareholders in British Energy are preparing to call an extraordinary general meeting to force out Adrian Montague, the company's chairman, if he refuses to reconsider plans to restructure the nuclear power generator.



Invesco, which holds a 6 per cent stake in British Energy, and Polygon, the secretive hedge fund, which has a 5.6 per cent stake, are believed to have agreed that an EGM vote to oust Montague may be the only way to halt the restructuring. The two investors are fierce opponents of a government-backed rescue package for British Energy, which will leave shareholders with just 2.5 per cent of the equity in the new company.

Montague told shareholders at British Energy's annual meeting last Thursday that he would be forced to delist the company if they oppose the rescue deal at a vote scheduled for October.

An executive close to the rebel group said: "We have nothing against Montague himself, and we will try to resolve this dispute amicably. But at the end of the day, requisitioning an EGM in a bid to get him replaced is something that is a very real option."

Between them Invesco and Polygon have more than the 10 per cent stake required to call an EGM. But to force out Montague they will need the support of other institutional investors in the nuclear generator.

The backing of Brandes, the secretive US fund manager which holds a 6.9 per cent stake, will be crucial. So far, Brandes has remained silent. Although it is believed to be sympathetic towards Polygon and Invesco's demands to change the restructuring terms, it is unclear whether it would back the removal of Montague.

Brandes recently played a key role in the battle for control of Marks & Spencer as the largest shareholder, with a 12 per cent holding at one stage. It said it would support the takeover attempt by retail entrepreneur Philip Green, but only if it was approved by the M&S board.

The restructuring of British Energy is fraught with legal challenges. The company's board believes that the deal, which is still subject to the approval of the European Commission, cannot be stopped by shareholders.

The rescue package was drawn up when falling wholesale electricity prices led British Energy's nuclear plants to lose 5m a week, threatening the company with total collapse.

Under the terms of the agreement, the company's bondholders and the Government will receive the vast bulk of the shares, with existing shareholders left with just 2.5 per cent, plus warrants for a further 5 per cent.

Although Polygon has stated that the current restructuring plan is legally binding, it believes there is an opportunity at the end of January, when the current agreement with creditors ends, to renegotiate a better deal for shareholders. It has devised an alternative plan which would give investors 30 per cent of the equity.

http://www.money.telegraph.co.uk/money/main.jhtml?xml=/money/2004/08/08/cnbrnrg08.xml&menuId=242&sSheet=/money/2004/08/09/ixcity.html

British Energy: fresh solvency fears

Oliver Morgan
Sunday August 15, 2004
The Observer

Concern is mounting that British Energy may have difficulty convincing the government of its future solvency - because of rising electricity prices.
Concerns centre on the need for the nuclear generator to put cash aside to cover liabilities to its electricity customers who bought up almost all of its output for the next year. BE must hold cash so that, if it ceases trading, it has funds to pay customers who must meet their needs in the open market. The higher the price, the higher the collateral needed. But BE's cashflow does not rise, as it has sold forward its output.

BE was forced into a government-sponsored restructuring in 2002 when the electricity price slumped. In the BE annual report, chief executive Mike Alexander discloses that BE's collateral requirement has risen to between 270 million and 320m as prices have risen 'based on the current sales mix and no further undue volatility in the forward curve for electricity prices'.

Prices are expected to rise; this year's winter contract is about 30 per megawatt hour, in 2005 it is 32.50, according to consultants Heren. But one senior source said there were deep concerns about steeper rises and about volatility in electricity and energy markets in the coming two years.

The restructuring must be completed by 31 January and get European Commission approval. But Trade and Industry Secretary Patricia Hewitt must agree BE can generate sufficient cash to remain a going concern. Sources say DTI officials have concerns over the collateral but a company spokesman said funds were sufficient.

http://observer.guardian.co.uk/business/story/0,6903,1283123,00.html

anybody got any views on where they see british energy going in the short term...?? still looking to trade the stock around 20p...

hi peter, been watching this myself, i had been trading from 9p up to 18.5p, i made good money from this. personally i would be shorting it now, i think it's going back to sub 10p in the coming months, but i'm staying well away from it from now on, i've made a new car and a nice holiday from it , which is more than can be said for the poor shareholders!!!

i'm going to start trading Superscape again tomorrow results out soon, the price has dropped 25% on good newsflow, i think there is a few quid to be made.

Released today : Brian Stark has bought more shares in the last week or so.


RNS Number:0707C
British Energy PLC
17 August 2004



17 August 2004

British Energy plc


Notification for the purposes of sections 198-203 Companies Act 1985 - British
Energy plc (the "Company")

Brian J. Stark, of business address 3600 South Lake Drive, St. Francis,
Wisconsin 53253, USA, hereby gives the Company notice as follows:

1. At close of business on 05 August 2004 Mr Stark was interested in a
total of 42,841,175 shares of the Company.

2. On 13 August 2004 his interest increased (by way of further purchases)
so that he became interested in a total of 44,841,175. Of these
44,841,175 shares:

(A) the interest in 33,630,881 shares arose from the holding registered in
the name of Shepherd Investments International Ltd, with registered office
c/o HWR Services Limited, Craigmuir Chambers, P.O. Box 71, Road Town,
Tortola, British Virgin Islands ("Shepherd"), which is managed by Stark
Offshore Management LLC, with registered office at 3600 South Lake Drive,
St. Francis, Wisconsin 53253, USA ("Stark Offshore"). Mr Stark controls
at least one-third of the voting power of Stark Offshore; and

(B) the interest in 11,210,294 shares arose from the holding registered in
the name of Stark International, with registered office c/o Arthur Morris,
Christensen & Co., Century House, 31 Richmond Road, Hamilton HM 08,
Bermuda ("Stark"), whose managing general partner is Stark Onshore
Management LLC, with registered offices at 3600 South Lake Drive,
St. Francis, Wisconsin 53253, USA ("Stark Onshore"). Mr Stark controls at
least one-third of the voting power of Stark Onshore.

3. (A) of the 33,630,881 shares held by Shepherd as at close of business on
13 August 2004, 30,818,381 were ordinary shares and 2,812,500 were
ordinary shares represented by an interest in 37,500 American Depositary
Receipts ("ADRs").

(B) of the 11,210,294 shares held by Stark as at close of business on
13 August 2004, 10,272,794 were ordinary shares and 937,500 were ordinary
shares represented by an interest in 12,500 ADRs.

4. The interests in the shares detailed at paragraphs 1-3 above do not
arise by virtue of such an interest as is mentioned in s.208(5) Companies
Act 1985.

This information is provided by RNS
The company news service from the London Stock Exchange
END

HOLBRGDIBBBGGSR

Released Yesterday :

RNS Number:1101C
British Energy PLC
18 August 2004


18 August 2004

British Energy plc

Notification for the purposes of sections 198-203 Companies Act 1985 - British
Energy plc (the "Company").

The Company has today received notification from Polygon Investment Partners LLP
("Polygon") that they have a notifiable interest in the share capital of British
Energy plc.

The shares in which Polygon are interested are 35,000,000 ordinary shares of 44
28/43p each in the capital of the Company (the "Shares"), representing 5.64% of
the allotted, called up and fully paid share capital. Polygon's interest in
these Shares arises by virtue of section 208 of the Act. The Shares are
registered in the name of Vidacos Nominees UBS London - 2303, 25 Molesworth
Street, Lewisham, London, SE13 7EX. The beneficial owner of the shares is
Polygon Global Opportunities Masterfund.


This information is provided by RNS
The company news service from the London Stock Exchange
END

"FOR IMMEDIATE RELEASE August 31, 2004

PRESS RELEASE

BRITISH ENERGY PLC:

POLYGON ANNOUNCES A MODIFICATION TO THE POLYGON REVISED PROPOSAL, A CALL FOR AN EGM, AND INTENTION TO FORM AN AD HOC COMMITTEE OF SHAREHOLDERS

On July 25th Polygon Investments - a UK investment firm - announced that it had made an approach to British Energy ("the Company" in June of this year with a revised restructuring proposal ("the Polygon Revised Proposal" that would be capable of providing additional value to current shareholders. The approach was rejected.

In the highlights of the Polygon Revised Proposal we mentioned that the UK Government would receive the same terms and economics as under the Proposed Restructuring of the Company (as defined in the Company press release of October 2003). We now believe that, due to the improving economic circumstances for the Company, it is possible to offer the UK Government a substantially better deal than that outlined under the Proposed Restructuring. The significance of this improvement to the Polygon Revised Proposal is that we believe it may help the Company to get a better deal for shareholders as the UK Government will seek to get the best deal possible for taxpayers. In addition, the European Commission, under the Commission's Rescue and Restructuring Guidelines ("the Guidelines", requires that aid be limited to the "strict minimum needed to enable restructuring to be undertaken in the light of existing financial resources" (See paragraph 40 of the Guidelines; paragraph 52 of the new Rescue and Restructuring Guidelines, and paragraph 210 of the Commissions invitation to submit comments on the state aid for the Company (OJ 2003C180/5).

Polygon reiterates its willingness to discuss this Polygon Revised Proposal with the Company, representatives of the UK Government, and representatives of the European Commission.

In addition, Polygon Investments, in conjunction with other large shareholders of the company announce today that they intend to requisition an Extraordinary General Meeting of British Energy PLC. The appropriate documents will be submitted to British Energy shortly.

The purpose of the EGM is to consider and vote on a number of resolutions (full details of which are attached in the appendix to this press release). These include resolutions seeking to ensure that the British Energy board will not seek to de-list the Company's shares from the Official List, or make a material disposal of the Company's assets, without shareholders' prior approval. They also include a resolution asking the board to renegotiate the terms of the existing restructuring proposal so that it is more favourable to shareholders.

Polygon also intends to form an ad hoc committee of shareholders to co-ordinate information about the proposed shareholder vote and other relevant matters. We believe that the Company should also pay the reasonable legal and financial fees and expenses of the ad hoc shareholders committee, as the Company continues to pay such fees for creditors. This claim relates to the Creditor Restructuring Agreement made as of September 30th 2003 between, inter alia, the Company, certain of its subsidiaries, certain of its creditors, certain of its bankers, British Nuclear Fuels PLC, and certain of its bondholders and in particular, clauses 9.1 and 9.2 thereof, relating to the payment of reasonable fees and expenses incurred by certain parties interested in the restructuring of the Company.

General Enquiries to:

M: Communications

Tom Hampson +44 (0)20 7153 1530
+44(0) 7974 228852
hampson@mcomgroup.com


Shareholder Enquiries to:

Gemma Knowles knowles@mcomgroup.com

Polygon has also set up a website, www.be-fair.org.


NOTES TO EDITORS:

Background on Polygon

Polygon Investment Partners LLP ("Polygon" is a global private investment firm based in London and New York. It is authorised and regulated by the Financial Services Authority. Polygon manages a multi-strategy investment fund and invests in a wide range of publicly traded securities. The firm currently has over $1.35 billion under management. www.polygoninv.com


APPENDIX: PROPOSED EGM RESOLUTIONS

Special Resolutions
1. THAT the articles of association of the Company be amended by the inclusion of the following article to be designated article 88(A) immediately prior to existing article 89:
88(A) Power to cancel listing
Where the board wishes to cancel the listing of the Companys securities from the official list of the UK Listing Authority and/or its trading on the London Stock Exchanges market for listed securities and/or any other exchange or market upon which such securities are listed or traded, the board will not commence any procedures to, or cancel any such listing or trading without the previous sanction of a special resolution of the Company.
2. THAT the board be and is hereby directed that no amendment or extension of time for allowing performance of, or satisfaction of conditions to, the Creditor Restructuring Agreement made as of 30th September 2003 between, inter alia, the Company, certain of its subsidiaries, certain of its creditors, certain of its bankers, British Nuclear Fuels PLC, and certain of its bondholders (as may have been amended, varied or novated prior to the date of this resolution) be allowed, granted or made without the previous sanction of a special resolution of the Company.
3. THAT the board be and is hereby directed not to sell the assets or undertaking of the Company or the assets or undertaking of any subsidiary of the Company or the shares in any subsidiary of the Company or issue or allow the issue of any new shares in any subsidiary of the Company to any person in circumstances where any such action would require the approval of shareholders under the Listing Rules of the UK Listing Authority (assuming that the Company was listed on the Official List of the UK Listing Authority at the relevant time) in any case without the previous sanction of a special resolution of the Company.

Ordinary Resolutions
4. THAT the board be and is hereby advised that shareholders wish them to use all reasonable efforts to obtain for holders of shares in the capital of the Company terms that are more advantageous to such holders than the terms currently available to them pursuant to the Creditor Restructuring Agreement made as of 30th September 2003 between, inter alia, the Company, certain of its subsidiaries, certain of its creditors, certain of its bankers, British Nuclear Fuels PLC and certain of is bondholders (as may have been amended, varied or novated prior to the date of this resolution).
5. THAT the board be and is hereby advised that shareholders do not wish any application to the UK Listing Authority and/or the London Stock Exchange to cancel the listing and/or trading of the securities of the Company to be made, and wish no steps be taken to cancel such listing and/or trading (including notification to a Regulatory Information Service of such cancellation or despatch of a circular to shareholders in respect of such cancellation) pursuant to the rules of the UK Listing Authority or otherwise without the previous sanction of a special resolution of the Company."

BE to spilt into 3:

http://www.reuters.co.uk/financeCompanyNewsArticle.jhtml;jsessionid=eccles?storyID=6126642&ticker=BGY.L&infoType=news&compname=BR.ENERGY

any idea what the implication to shareholders is since BGY is splitting into 3 seperate companies to win European Commission approval?

IMHO the implication of the 3 way split is neutral (as the trader quoted in the report said). To me the timing of this story suggests PR spin from BE to try to give the impression that the "official" restructuring is inevitable and also deflect attention away from Polygons announcement of the previous day.

I agree LordCake - However buyers beware its a big drop from here if the board gets its way shareholders will get nowt! As I see it the only way to stop the mega dilution is for the government to step in as it did with Railtrack.
I doubt it will happen this time but we shall see.
Bering in mind the share building going on over the past twelve months
and an almost constant rise someone may know the outcome already!!

Thanks, Lord Cake.

Balanced report on the BBC website: http://news.bbc.co.uk/1/hi/business/3618616.stm

Also from Radio 4 today: http://www.be-fair.org/media/bbcradio4_03.09.04.mp3

British Energy rebels offer 800m to scupper shake-up
By Tim Webb
05 September 2004


Rebel shareholders of nuclear generator British Energy have offered to buy out its 800m of debt, in effect cancelling its financial restructuring.

They have been holding secret talks with the European Commission aimed at putting together an alternative rescue plan for the company, which was saved from bankruptcy by the Government two years ago.

The EC is currently examining the existing government-backed restructuring, which would leave shareholders with just 2.5 per cent of the equity. The EC is expected to give its approval within weeks, unless the rebel shareholders can persuade it to back their own plan.

The hedge fund Polygon, which is leading the revolt, believes British Energy is worth around 1.5bn. But the company has a current stock market value of only 140m because of the proposed restructuring, which favours bondholders over shareholders. British Energy bonds have been trading well above par, at around 1.70 per pound.

Polygon says the restructuring should be changed to take into account higher electricity prices, which should boost its stock market value.

Under the proposals suggested to EC officials at the end of last week, the rebel shareholders - Polygon, Brandes and Invesco, who together own 22 per cent of the company - would arrange up to 800m in bridging finance to buy out bondholders holding around 400m of debt at face value. The shareholders would also repay the rest of the bank loans and debt. In return, the shareholders would receive new shares issued in the company.

Polygon argues that it can secure a better deal for UK taxpayers by cutting the amount the Government has to contribute to its long-term decommissioning liabilities. British Energy argues that without the proposed restructuring, the company would have gone into administration and that terms are binding.

On Friday afternoon, Polygon and Brandes, who together hold 12.5 per cent of British Energy's shares, also notified the company in writing that they are seeking an extraordinary general meeting. Under listing rules, a company must agree to hold a meeting if shareholders representing more than 10 per cent of its shares demand it.

British Energy has until the last week of October to hold the meeting. Polygon wants shareholders to be given the opportunity to vote on the government-backed restructuring.

If shareholders vote against the restructuring but the company, as it has indicated, goes ahead anyway, Polygon is threatening legal action. It would claim that British Energy's directors had breached their fiduciary duty to look after the interests of shareholders.
5 September 2004 01:07

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Printable Story

09/09/04 00:16 UK taxpayer burdened with 1.7 bln stg of British Energy liabilities - MPs

They want a brighter future for the company....
The management should not receive any bonuses if they go ahead with the current D4E proposal....
Good for the company and the shareholders.

Yes I agree - however I see sellers are out in force.
This must be good for shareholders and in my mind Im convinced
Sharehoders will be given a better deal.
No doubt!!

cAN ANYONE PLEASE EXPLAIN THE RAFT OF 100 SHARE BUYS GOING THROUGH THIS MORNING?
IS THIS CORRECT DO YOU THINK?

if this is a done and dusted deal and shareholders are to get only 7%
why are the creditors making such a fuss.

If there is any shred of a chance that terms could be re-negotiated
this baby will fly. And as it ticks up yet again someone must know something?



--------------------------------------------------------------------------------



Legal spat breaks out in British Energy rescue
Tue 14 September, 2004 16:56

By Gerard Wynn

LONDON (Reuters) - A war of words between minority investor Polygon and creditors of indebted nuclear power group British Energy has broken out after they wrangled over a rescue plan carving up the company's equity.

In October 2003 British Energy, its creditors and the government agreed a rescue plan which proposed that creditors would get over 90 percent of undiluted equity in a restructured company in exchange for cancelling more than 1.3 billion pounds of debt, leaving shareholders with around seven percent.

But an exceptional increase in power prices since October has meant that the deal effectively over-compensates bondholders, with bonds trading at 176 percent of face value on Tuesday, indicating the level of over-payment.

Last week minority shareholder Polygon demanded an EGM after BE said it would de-list the company -- leaving shareholders with nothing -- if shareholders did not approve the rescue plan.

"If the company de-listed we would proceed to take legal action, as we've said we would," a source close to Polygon said on Tuesday.

Now creditors have joined the fray, saying that a de-listing was legal if required to see the rescue deal through.

"It is dangerous for your client to contend that the company should not take steps to promulgate the CRA (creditor restructuring agreement), since that is exactly what the company is bound to do," lawyers Cadwalader, Wickersham & Taft LLP, acting for an ad hoc committee of BE creditors, said in a letter to Polygon's lawyers, dated September 14, obtained by Reuters.

The spat has escalated in anticipation of imminent approval for the rescue plan by the European Commission's competition authorities, after which the shareholder vote and implementation of the debt swap can go ahead.

If BE does not call an EGM, Polygon would be in a position to sue the company, while if it does call an EGM and shareholders voted to prevent a de-listing, the creditors could sue the company for breaching the CRA, a source familiar with the situation told Reuters.

They try to pretend that's a done deal.

We know the terms of agreement has been renegotiated many times before. The terms changed for many shares like telewest, Marconi etc. offcourse all in favour of the bondholders. I wounder why bondholders say that the terms cannot be negotiated this time!!! That's probably why some of the bondholders like DB has recently bought BGY.

Any comments?

Anyway, I might be wrong, but I beleive oil and Gas prices will not fall and, therefore, energy prices will stay high. 2.5% of BGY should worth more than
21. All IMO

Nice one sue

whats the likelyhood of shareholders getting more than 2.5%. SLIM. can you guys tell me when we will find out?

Also they are trying to delist bgy from LSE, what are the implications for shareholders on this point

I believe if they de-list, the shareholders get nowt!

If they de-list the shares still have a value - shareholders will still own 2.5% of BE, but de-listed shares are difficult to trade. There is a possibilty of re-listing once the restructuring has gone through.

Rubbish ptholden - dont comment if you dont know the facts.
They will de-list but existing shareholders will receive
new shares representing 2.5% of the new company at some time in the future.
Even if they de-list the existing shares will ahve a value!!!
Well said stoatwrites - they will relist.

hello guys.
does any one know what is happening with bgy at the moment?
for me it is very dangerous situation because it could drop all the way down, if you look at the one year chart.
but looking at the 5 years share price chart, it is ending an important hand and cup,hat could push the share price quite high the price if everything goes ok. ftse is treading high almost 800 points, but we have to see what will happen with the america market. The election has finished but the dollars weakness, which is no bad because will keep the americans spending in america and will keep it looking good in a way that they want, please i would like to hear from you and about bgy because i am worried.
Richard

Richard, see all the previous posts. The shares were delisted from the LSE in mid-October and will relist again in the third week of January 2005 after the restructuring has been carried out.

Wow suehelen thank you very much.
we will see what will happen

very pleased to see some positive comment here,everything seemed to vanish in a moment, thought I'd lost all without a word.

thanks SueHelen for as usuall reliable info.

HELLOS GUYS
i love this company.
for me it is the best penny share that i know.
for a short term is very good, but now is doing this. in my opinion it is in a very dangerous position.
if they do a head and shoulder, we will be in trouble for a long time,
the only thing that keeps me happy is the 5 years share price.
if everything goes well we could reach 30-50p by july or sept, and that would be good, but to stop like this is very bad
all the best RICHARD

hello future millionaires!!!!!!!
does any one know the code for british energy Co and argos shop.
a new year is coming, happy christmas xmas.
and all the best.RICHARD

Independent

BRITISH ENERGY shares set to be re-listed on Monday in a move which is likely to value the nuclear power generator at up to 1.8bn, some 56 times more than it was worth when trading was suspended last autumn

http://www.moneyam.com/action/news/showArticle?id=590918

I can't understand why it's valued 56 times more. Can you explain how?
I think around 800p a share would be the right value.

From the Independent this morning...but price now motoring again!!

"British Energy held steady at 380p despite news that the US fund management firm Duquesne Capital now controls 6.2 per cent of the electricity generator. The firm is run by the star Wall Street operator Stanley Druckenmiller, who is reported to be one of the key people behind George Soros' Quantum Fund.

Since January's debt-for-equity swap, the investment community has become increasingly upbeat about British Energy's prospects. One reason for this is the sharp rise in wholesale electricity prices, which have increased by one third so far this year."

The result is very good. Can it touch 7 in a year?

British Energy confirms to extend Dungeness B life to 2018 http://www.moneyam.com/action/news/showArticle?id=964600

That is 10 years more than expected

BGY should move anytime soon. the future is bright imo

It seems nuclear reactors are the chapest answer to energy shortage.
Has BGY paid off its debt?

Is anyone interested in BGY?
They have had a fantastic run and IMHO have more in the tank.
The aniversary of chernoyl looked to upset the chart but they are now back on track.
One to lock away?

British Energy Group PLC
20 December 2006

British Energy Group plc

20 December 2006

Hunterston B and Hinkley Point B

The Company has largely completed inspection and repair of boiler tube
bifurcations at all 4 units at Hunterston B and Hinkley Point B. The results of
the boiler tube bifurcation inspections at the R4 units were broadly in line
with previous expectations.

To provide baseline data for the boiler safety case, boiler management strategy
and life extension decisions, other boiler tube components (tail pipes) were
inspected. These revealed a small number of defects requiring repair. Repair of
these components has been completed at Hinkley Point B R4 and has yet to be
completed at Hunterston B R4. As a prudent measure, there will be further
inspections at both R3 units so that the Company can be satisfied as to the
integrity of the boilers for the return to service of all 4 units at 70% of full
capacity.

As a result of the work referred to above and resulting human resource
constraints, the Company is now working towards a return to service of all four
units by the end of March 2007, subject to approval of the associated safety
cases and assuming no further unexpected problems are identified by the
inspections.

The impact on nuclear output in the financial year 2006/07 of a return to
service at end of March 2007 remains as set out in the Company's interim results
announcement on 17 November 2006. In concert with these further inspections,
the Company is seeking to bring forward the work intended for the planned outage
of both units at Hunterston B in May 2007. This will have a positive impact in
the financial year 2007/08.

Hartlepool

The Company announced on 16 October that Hartlepool power station had shutdown to undertake repairs to cast iron pipe work related to the cooling water system. The replacement of the affected pipe work has now been completed and the Company is in the process of returning the units at Hartlepool to service. One unit returned to service on 18 December 2006. The other unit at Hartlepool is
expected to return to service over the next week.

Notes: Tail pipes consist of a length of boiler tube at the top of the boiler.
The issues affecting the tail pipes are specific to Hunterston B and Hinkley
Point B.

Citigroup cut BGY recommendation to 'sell' from 'hold', and JP Morgan cut its rating to 'neutral' from 'overweight'. Down 18p to 520p today.

Why the fall?

Can it be the warm weather effect?

I think nuclear energy has fallen out of favour for the time being ahoj

The fall is due to on-going repair of boiler tube bifurcations at all 4 units at Hunterston B and Hinkley Point B. Expect more downside as these units won't be in full service until at least end of March.

That's god. It will help to keep electricity prices up and he load closer to 90%.

Not going to well Ahoj - but IMO there the SP must bottom out somewhere around 350p, and once there is more certainty over the governments position on nuclear energy the shares could rebound nicely.

Sorry but I disagree we are going bust im afraid.

I think British Energy will fall to 300p with the news below...



FOCUS British Energy's Hunterston/Hinkley Pt plants may not have lives extended
AFX


LONDON (AFX) - British Energy PLC boss Bill Coley today invited responses from potential partners for new build nuclear power plants but analysts were more interested in comments hinting that two existing plants, Hunterston B and Hinkley Point B, may not have their lives extended.

Coley, who joined British Energy in 2005, has invited contractors, investors, utilities and anyone else who might be interested to beat a path to his door to discuss the next generation of nuclear power stations. Most who are will have already done this, and the emphasis on the future has served to divert attention away from what has been a difficult nine months for the energy firm.

Hinkley Point and Hunterston have been running on lower output since the middle of last year after cracks were found in their boiler tubes. Dungeness, Hartlepool and Heysham 2 have all had difficulties over the last year, and 'human performance issues' at Torness caused a 50 pct jump in shortages there in the three months to July 2 last year.

Coley was relatively upbeat today: Group EBITDA was up from 462 mln stg to 775 mln stg in the nine months to Dec 31 2006, and Hunterston and Hinkley Point should be up and running by next month. On the other hand, analysts had already said March was a 'worst case scenario', and Coley admitted that Hunterston may not open until April because he had brought forward a planned outage to repair problems unrelated to the boiler tube issues.

But analysts' attention has focused on new guidance over whether the lives of the two stations will be extended. British Energy has conceded that because Hunterston and Hinkley will only come back on line at 70 pct of their former capacity (because anything higher would involve further investment to upgrade the boilers) extending their lives beyond 2011 may not be economically justifiable.

'Life extension of these two stations could be economically unjustifiable, depending on projected operating capacity and forecasts of electricity prices, along with all other factors considered in the life extension decision,' the company said today.

The basic problem is that a plant operating at around two thirds capacity does not generate so much electricity, so prices would need to be high for British Energy to break even -- not the way they are going at the moment.

'There were lots of questions today on life extensions -- they're not a definite,' said one analyst. 'Now for the first time British Energy is beginning to say it might not be economically justifiable to have a life extension -- if the thing only operates at 70 pct they need just over 30 stg/MWhr to break even. It's such a fixed cost business -- if you have a lower output then you need higher electricity prices to break even -- so it may not be worthwhile to continue to operate the reactors.'

The analyst described a price of low 30 stg per MWhr as 'quite optimistic' going forward.

Merrill Lynch agreed. 'Given potential additional capex and the current lower level of power prices, it is uncertain whether life extensions can be assured for these two plants,' analyst Philip Green said.

The company will make a decision on life extension by the end of March next year. On the new build front, meanwhile, all eyes will be fixed on what the government says regarding the planning regime in next month's energy white paper.

British Energy gets regulatory approval to restart two more reactors
http://www.moneyam.com/action/news/showArticle?id=1977029

LONDON (Thomson Financial) - British Energy Group PLC said it has received permission from the Nuclear Installations Inspectorate to restart Reactor 3 at Hinkley Point B nuclear power station and Reactor 3 at Hunterston B nuclear power station.

It follows an announcement on May 11 that the company had been granted permission to restart Reactor 4 at Hinkley Point B while three days later, it received permission to restart Reactor 4 at Hunterston B.

The company said all four units will return to service at about 70 pct of full capacity.

The units had been shut down for inspection, repair and preparation of safety cases related to boiler tube cracking issues.

TFN.newsdesk@thomson.com

rsh/wj

Nuclear appears to be the only solution. It seems everyone is gradually accepting that.
BGY has so many reactors "now"---a couple of times more that its market value.

Today, Citi group raised price target and changed its view from sell to hold.

It appears that they have no plan to sell any of the 450M shares cheap. I think they will start to sell after banking the first dividend, above 620p.

Looks like my 313 post was nearly right on the mark, but that they bottomed at 390.
To Transco - doesnt look like they're going bust either, I mean its got to be hard to do that if you own a few nuclear reactors that are guarenteed to make millions every year. Even the Stanelco board would struggle to attain such a monumentous feet.

Youve done well to have the patience Ahoj and im sure it will be rewarded in the long run.

Mr Potts,
Point well taken.

I guess I was being flippant. They look a good hold to me - whats the alternative?
Candles and wood stoves!!

I'm in anyway - best of luck to everyone this will be a bumpy ride.
Strong nerves needed.

Transco

I beleiv BGY will be in FTSE100. Market cap is much higher than many FTSE100 companies now. PE is the lowest though. All IMO

A couple of 6m trades at highs. good for bounce

DOW closed 1.45% up, we closed down over 1.5% yesterday. It openned higher and we are only up 1.20%.
Any reasons behind this!!!

Is it possible to manipulate a stock?
I think behaviour of BGY is not normal!!!

British Energy Group plc


The Board of British Energy Group plc notes the recent speculation about a
possible transaction involving the Company. The Board announces that the Company
is in discussions with interested parties in the context of its future and its
plans to take a pivotal role in any new nuclear programme. These discussions
could lead to a business combination or an offer for the Company, although there
can be no certainty that any offer will be made.

----

The war for 32% BGY stake began.
No1 : RWE to offer 2.5 bln eur for 35.2 pct stake in British Energy (At yesterday's closing price)

Energy has the highest power given oil at $100.

A big partner will help BGY to make more money out of energy merket.
Goverment knows how important BGY is. There is no reason to sell it below 750 IMO.

From AGM today:

.... Turning now to the wider market environment. As I am sure you will be only too well aware, commodity prices have risen to unprecedented levels in recent months. Baseload power prices have increased by over 45% in the last 3 months alone. Crude oil has reached over $140 per barrel, and coal is currently trading at over $200 per tonne. During the financial year to date, we have been successful in continuing to lock in forward sales of electricity, principally in respect of financial years 2010/11 and beyond, and have achieved this at substantially higher prices compared to last year. It will, however, take time before we see these prices coming through in our realised price for the business. In the shorter term, our Trading and Sales team continue their careful management of the fixed price trading book, in particular taking into account the expected timing of the return to service of the BCUs.