REG-Centrica PLC Centrica announces decision not to participate in UK nuclear new build and launches £500 million share repurchase programme

Mon Feb 4, 2013 5:07am EST

* Reuters is not responsible for the content in this press release.

LONDON--(Business Wire)--

4 February 2013

Centrica announces decision not to participate in UK nuclear new build and
launches £500 million share repurchase programme

Centrica plc has taken the decision not to participate in the construction of up
to four new European Pressurised Nuclear Reactors in the UK. 

In 2009, Centrica acquired a 20% interest in EDF Energy`s eight operational
nuclear power stations in the UK and also took an option for a 20% interest in
the construction of new nuclear power stations at Hinkley Point and Sizewell.
The acquisition was funded through a £2.2 billion Rights Issue, completed in
2008, part of which provided financing for the investment in new nuclear. Having
taken the decision not to proceed with the new nuclear investment, the Group
will launch a £500 million share repurchase programme, to return surplus capital
to shareholders, which will be conducted over the next 12 months. 

With pre-development expenditure on the project approaching the agreed £1
billion cap, Centrica`s decision not to proceed follows a detailed appraisal of
the project. While there has been progress in a number of key project areas,
particularly design and planning, there remains uncertainty about overall
project costs and the construction schedule. Centrica`s 20% share of the
pre-development expenditure will be written off as an exceptional cost in the
Group`s 2012 results. 

Sam Laidlaw, Chief Executive of Centrica, said: "We believe that nuclear
generation has a valuable role to play in a balanced UK energy mix. Centrica and
EDF continue to enjoy a successful partnership in existing nuclear. However,
since our initial investment, the anticipated project costs in new nuclear have
increased and the construction timetable has extended by a number of years. 

"These factors, in particular the lengthening time frame for a return on the
capital invested in a project of this scale, have led us to conclude that
participation is not right for Centrica and our shareholders. In 2012 we
invested over £2 billion in securing supplies of energy for the UK and where we
see attractive returns we will continue to invest in Britain`s energy future." 

Centrica`s 20% interest in the eight existing nuclear power stations in the UK
is unaffected by this decision. 

The company is due to present its Preliminary Results and will provide an update
on strategy and investment plans across the Group on 27 February 2013. 


Notes to editors

As part of the 2009 transaction, EDF Energy and Centrica plc formed an 80/20
joint venture to undertake pre-development activities for a nuclear new build
programme, with the intention of constructing, operating and decommissioning
four European Pressurised Nuclear Reactors. 


Centrica Investor Relations: 01753 494900 

Centrica Media Relations: 0800 107 7014

Centrica PLC 

Copyright Business Wire 2013

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.