Lenders Will Buy Eggborough Coal-Powered Plant from EDF

EDF’s energy plant at Eggborough, a coal-fired plant, has been acquired by the company’s lenders, EDF announced on Thursday. The lenders had been debating whether or not to exercise their right to acquire the coal-run power plant, and announced last week their decision to do so.

the lenders acquire the rights to take on the power plant when British Energy was restructured and then bought by EDF during the beginning of this year. Lenders for the UK-based utility company include Bluebay, which operates as a distressed-debt fund. 

EDF confirmed the acquisition in a press release Thursday and British Energy’s banks will be claiming their right to the Eggborough facility under an agreement made in 2005 with the British Government. British Energy was restructured early this year, and then acquired by the French utility giant shortly after this year began.

Lenders for the British Energy built Eggborough coal powered facility had the option to purchase the power station before March 31, 2010, however, under the agreement the lenders had to reach a decision whether or not to buy the station by the end of this month.

Under the agreement lenders will be acquiring the 1,960 MW facility for 104 million GBP in addition to a waiving their rights to 83 million GBP in outstanding debts against the facility, which British Energy was unable to pay off. 

EDF had previously agreed to the arrangement upon purchase of British Energy, and the transaction is in accordance with contracts signed by the EDF and the European Commission earlier in 2009 when EDF acquired British Energy and their assets.