FTSE 100 listed integrated energy company Centrica has announced the launch of a 500m-pound share repurchase programme following its decision not to participate in a UK nuclear new build.
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 £2.2bn rights issue, completed in 2008, part of which provided financing for the investment in new nuclear.
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Having taken the decision not to proceed with the new nuclear investment, the group will launch a £500m share repurchase programme, to return surplus capital to shareholders, which will be conducted over the next 12 months, the update stated.
Sam Laidlaw, Chief Executive Officer 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."
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