Privatising BNFL on the agenda

1 October 1998

The UK government is considering privatising parts of BNFL. Trade and Industry Secretary Peter Mandelson has appointed accountants KPMG to consider ‘public private partnerships’, whilst BNFL has appointed investment bank Rothchilds. The DTI emphasised, however, that no decisions have yet been made.

“The Government has no proposals or plans to privatise BNFL”, says a DTI statement, “all we are doing, at the request of the Treasury, is to consider options for the future structure of the company.” BNFL recently announced a pre-tax profit of £199 million for the financial year 1997/98, down from £216 million in the previous year. However the profits were reduced due to the incorporation of Magnox Electric into BNFL. The dividend paid to the government rose from £46 million to £53 million.

“This is a creditable performance in a year when the company also made substantial progress in implementing its ‘Beyond 2000’ stategy aimed at strengthening BNFL’s position in the nuclear services market,” said chairman John Guinness.

BNFL is positioning itself to become a major international nuclear company, and recent events have been interpreted as indicating a future privatisation. Guinness believes the value of BNFL can triple. The company’s purchase of Westinghouse, likely to be completed by the end of 1998, and winning of a $7 billion contract to clean up the US Hanford site, reflect the direction the company is heading.

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