Bondholders 'No' to British Energy

LAWYERS acting for British Energy's leading bondholders have rejected shareholder Polygon's calls for changes to the restructuring of the ailing nuclear generator.

Polygon's eleventh-hour proposals - including a rights issue to pay off bondholders - have 'no basis in law or recent practice', says a letter sent by bondholders.

The letter, in response to one sent by Polygon to BE, accuses Polygon of an 'orchestrated campaign to subvert BE's binding restructuring through the release of disinformation to the market'.

In a second blow, a source close to Humbert Drabbe, head of the European Commission's competition unit, played down the significance of its meeting with Polygon later this week. 'They asked for a meeting at service level, and that is what they will get.'

Polygon refused to comment. EC approval of BE's restructuring could come as early as next Wednesday.