HEDGE fund company Polygon Investments is to stage a protest outside British Energy’s annual general meeting next week as it scales up its attempted coup at the struggling nuclear power group.
Polygon, which claims the government-backed rescue plan is unfairly biased towards the company’s bondholders, is planning to bombard shareholders with information on its alternative restructuring proposals.
The group, which holds the voting right
s to 5.6% of BE’s shares and has the backing of a 6% stake held by Invesco, will also launch a web-based petition early this week in which shareholders can sign up to its cause.
But sources close to British Energy have hit back at Polygon’s claims, insisting that much of its case is based on allegations that "are just wrong".
Polygon partner Reade Griffith said: "The company may not give us the platform to speak during the meeting, but we’ll be talking to shareholders in the lobby, in the car park and wherever else we can.
"This is only the start. We’ll be building up momentum into September and October as the European Commission ruling nears completion."
British Energy is legally bound to seeing through the restructuring deal which saved it from administration last October. Any such insolvency proceedings would have wiped out all value for shareholders.
Polygon is hoping to delay the completion of the agreement until January, when the agreement with creditors lapses. The hedge fund believes this will allow it to formally propose its new restructuring plan, which it claims could hand shareholders as much as 30% of the group’s equity. If the deal lapses, British Energy would once again be threatened with administration.
The planned restructuring move will leave shareholders with just 2.5% of British Energy’s shares and warrants over a further 5%. Polygon has claimed that this will effectively be diluted to just 1% because of the government’s involvement.
A source close to the nuclear company said: "They are basing this claim on the belief that the government gets 65% of the company’s shares after the restructuring. That’s not true. The government gets 65% of income. They’re just wrong and really need to get a better brief."
He added: "Shareholders were not part of any proper consultation here. [BE] claim that there was no other option to them and that something had to be done. We don’t dispute that something had to be done. What we do quibble with is the deal that was done which gives no potential upside to shareholders."
