Troubled British Energy replaces chief executive

British Energy, the loss-making nuclear power producer, shocked the markets yesterday by ousting its chief executive just weeks after the completion of a £5 (NZ$13) billion government-backed rescue of the company.

Mike Alexander, who was hired from the gas supplier Centrica two years ago to lead British Energy through the massive financial restructuring, will receive a pay-off worth about £425,000.

But his abrupt departure, orchestrated by the British Energy chairman Adrian Montague, means he will miss out on a bonus potentially worth £6m if the company hits financial and operational targets over the next few years.

Thanking Mr Alexander for seeing the company through the "complex and difficult restructuring", Mr Montague added: "Now that he has ... laid the groundwork for the operational and cultural rebuilding of British Energy, he has decided to seek a new challenge elsewhere."

Mr Alexander, 54, was informed of his fate over the weekend after an emergency board meeting to discuss his future. He has no new job to go to. He is being replaced by one of British Energy's non-executive directors, Bill Coley, a 61-year-old American who until two years ago ran the US power company Duke Energy.

Mr Coley will move from North Carolina to the UK to take up the job. He has signed a one-year contract but details of his pay package and relocation deal have yet to be finalised.

His appointment means that the two top executives at British Energy will be Americans with a background in the nuclear industry. The company's chief operating officer, Roy Anderson, was previously president of the Public Service Enterprise Nuclear Group in the US.

Mr Alexander's removal follows a difficult period for the company, culminating in the announcement in February of a £349m loss in the first nine months of the year after reactor failures hit nuclear output.

The group has been plagued by shutdowns of its Heysham 1 and Hartlepool reactors, resulting in an 11 per cent fall in output for the March to December period last year.

Company sources denied that Mr Alexander had been ousted as a result of shareholder pressure.

Rather, the board agreed that the company needed a chief executive with direct experience of operating nuclear power stations. He is the third chief executive to be forced out of the troubled nuclear generator in the past four years.

Peter Hollins was ousted from the job in 2001 by the then chairman Robin Jeffrey. A year later Mr Jeffrey was sacked after the company went to the Government asking for emergency support to avoid insolvency. Shares in British Energy fell 3p to 287p yesterday, valuing the company at £1.6bn.

 

- Independent