Westminster hopes of selling a significant stake this year in UK nuclear power producer British Energy have taken a beating, after revelations about leaks and cracks at several plants wiped a quarter off the company's share value.
British Energy has enjoyed a phoenix from the flames rise in recent years, having been on the brink of collapse, the company has seen a renaissance its profits and value over the last 18 months as high gas prices has resulted in business flowing back to the nuclear power producer.
The recent good fortune had boosted British Energy’s share price, leading major shareholder, the British government, to seek a sale while on top.
However, hopes of a 2006 divestment have been dashed following a 24% slump in British Energy’s stock price as a result of revelations over the poor relative health of its fleet of power stations.
According to newspaper reports, seven out of British Energy’s fleet of eight nuclear power plants have serious faults. With the exception of Torness, which is operating at normal output levels, the portfolio of sites suffer from leaks, cracks and faulty systems.
Hunterston B and Hinkley B stations have cracks in their boilers, while there is an underground leak at the Hartlepool reactor and Dungeness B has technical issues.
The UK government had hoped to recoup around GBP2.5 billion from selling up to half of its 65% stake in the business. However, now that the damaging revelations have slashed the energy provider’s share price by 24%, an imminent sale of government shares is highly unlikely.