ABSTRACT
On 5 September 2002 the board of British Energy plc, Britain’s largest electricity generator and the owner of eight nuclear power stations, announced the company had run out of cash and faced insolvency. Although the company had bank credit lines available, the company’s lawyers advised the directors that they might be breaking the law if they borrowed more money, if they believed the company faced no early prospect of recovery. The company’s credit rating was on the brink of junk status so it would have to post collateral – cash to cover the risk of non-delivery – to continue selling its power. Without cash it couldn’t trade. Unless it got hundreds of millions of pounds of immediate aid British Energy might have to shut down its power stations.
