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National Power PLC Share Buy-Back Programme, Plant Divestment and MMC Enquiry.

LONDON--(BUSINESS WIRE)--Dec. 19, 1995--

1. Share buy-back

 National Power PLC obtained authority from its shareholders
at its recent Annual General Meeting on 25 July 1995 to repurchase
up to 10% of its issued share capital, subject to appropriate
market conditions.
 The Company now announces that it wishes to continue its share
repurchase programme by buying up to 57,000,000 Ordinary Shares,
representing approximately 4.4% of its issued share capital.
 The transaction, when added to the 7.6% bought earlier this year
from HM Government, results in a total reduction of 12% in the
shares of the Company during 1995. The effect of this latest
transaction is expected to be an enhancement in earnings per
share of between 2% and 3% in a full year and an increase in
gearing of about 9%.
 The Directors believe it is right to continue their strategy
of enhancing earnings per share to the benefit of all shareholders
through a further buy-back of shares at a time when the MMC
enquiry has delayed any major call on the Company's funds.
Moreover the transaction will go some way towards enhancing the
efficiency of the balance sheet by increasing gearing. This
transaction does not affect the Company's commitment to the
acquisition of Southern Electric plc nor its international
 For legal reasons the Company is unable to purchase the interim
certificates in the Company which were sold by Her Majesty's
Government in March 1995 and which are currently trading in
partly-paid form. As a result, the Company is only seeking to
purchase Ordinary Shares which are trading in fully paid form.
 As part of the share repurchase programme the Company has
appointed Cazenove & Co. as its agent to effect on-market
 A shareholder who sells his shares to the Company through
Cazenove in its capacity as the Company's agent will be treated
as receiving a qualifying distribution for the purposes of UK
taxation. This treatment does not apply when a shareholder sells
his shares to a market maker as principal or to a third party.
 The amount treated as a qualifying distribution will be the
proceeds from the sale of each share less its capital value of
0.52. This qualifying distribution will be treated as income
for the purposes of UK taxation. A UK resident shareholder will
be entitled to a tax credit equal to one quarter of the amount
treated as a qualifying distribution. Each selling shareholder
who sells through Cazenove as the Company's agent will receive
a voucher from the Company showing the amount treated as a
qualifying distribution and the associated tax credit.
 In certain circumstances, any benefit arising to a shareholder
from treatment of part of the sale price as income and the
associated tax credit may be counteracted by the Inland Revenue
under Section 703 of the Income and Corporation Taxes Act
("ICTA"). The Company has not applied for clearance from the
Inland Revenue under the provisions of Section 707, ICTA 1988
that no such counteraction will be taken. The Directors of the
Company have been advised that it is unlikely that a general
clearance would be obtained, as present Inland Revenue practice
is to make any such clearance dependent upon each shareholder's
own circumstances.
 It should also be noted that treatment of the amount received as
a distribution may be less advantageous to certain shareholders,
particularly individuals, than the treatment which would be
accorded to a sale of shares to a marketmaker as principal or to
a third party.
 National Power emphasises that shareholders obtain their own tax
advice as to the specific consequences for them of selling their

2. Plant divestment

 In addition, the Company confirms that on 30 November 1995 it
had received offers from four bidders for the lease or purchase of
4,000 megawatts (MW) of coal-fired generating plant. The bids
have been submitted by Hanson (Eastern Group), and three American
companies, Applied Energy Services (AES), Enron and Mission
Energy. The three power stations to be sold are the 2,000 MW
plant at West Burton in Nottinghamshire, and the two 1,000 MW
stations at Ironbridge, Shropshire and Rugeley, Staffordshire.
The Company is now evaluating each of the bids and envisages that
a shortlist of selected parties will be finalised by early
January with a view to completing the transaction by the end of
March, 1996. The Company is confident the disposal of the three
plants will fulfil its commitment to the divestment undertaking
given to the Director General of Electricity Supply.
 National Power also welcomes the DGES's announcement on 12
December, in which he indicated that on the basis National Power
and PowerGen dispose of plant, since competition in the
generation market had increased with new independent capacity,
he would not seek any extension of the voluntary undertaking on
prices after March 1996.

3. MMC enquiry

 At the same time, National Power is arguing strongly to the MMC
that its planned acquisition of Southern Electric plc should be
cleared. The MMC has been asked to report by 22 March 1996.
Submissions have already been made and meetings planned in
accordance with that timetable.

4. Notes for Editors

4.1 On Share buy-backs: On 3 March 1995, National Power PLC
 purchased 98,483,539 of its 50p Ordinary Shares
 representing approximately 7.7% of the issued class from
 HM Government. These shares were subsequently cancelled
 by the Company.

4.2 On the plant sales. In February, 1994, National Power gave
 an undertaking to the DGES to use all reasonable
 endeavours to negotiate the disposal of about 4,000 MW of
 capacity by the end of December, 1995. During this period,
 the Company has kept the DGES informed of its actions
 regarding the undertaking.

 On 27 July, 1995, the DGES clarified a number of issues
 raised with him by prospective purchasers and the Company.
 This stimulated renewed interest and has resulted in a
 number of sufficiently attractive offers to lead the
 Company to conclude that a suitable purchaser could be

4.3 On the proposed acquisition of Southern Electric:
 National Power's recommended offer for Southern Electric
 lapsed on 23 November when Mr. Lang, President of the Board
 of Trade, announced that he was referring to the MMC both
 National Power's bid for Southern Electric and PowerGen's
 bid for Midlands.

 National Power currently holds 8.3% of the share capital
 of Southern Electric.

 Andrew Swanson
 Company Secretary

CONTACT: Investor and analyst queries to:

Brian Birkenhead,

Group Finance Director



Lynda Jenkins, Head of Investor Relations



Press queries to:

Andy Roe, Head of Press Relations

COPYRIGHT 1995 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1995, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Date:Dec 19, 1995
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