THE board of British Nuclear Fuels is expected to agree a £1 billion sale of its US Westinghouse business at the end of this month, The Times has learnt.

The sale of Westinghouse, the nuclear power station construction business, is expected to be the first in a series of disposals that the government-owned nuclear group will make in the next 12 months, as an alternative to privatisation of the whole business.

Mike Parker, chief executive of BNFL, told The Times that the board was close to going ahead with a Westinghouse sale, which will be overseen by the nuclear group’s usual bankers, NM Rothschild.

The Westinghouse disposal comes as many countries, including the US and the UK, are considering building new nuclear power stations as a way of securing their power supplies and cutting carbon emissions from fossil fuels.

The Pittsburgh-based company is bidding against French and Russian rivals to build four major power stations in China. It is also working with a consortium of US utilities on plans to start building new nuclear reactors in the US.

“The UK Government has been asking whether a new-build programme really fits with the risk profile it is seeking,” Mr Parker said. “It believes in the market; it doesn’t want to own assets.”

A review of BNFL’s role in 2003 said that the company must run its Westinghouse and other businesses for “value”. However, a hoped-for Public Private Partnership was shelved because of the problems at British Energy and Railtrack.

British Nuclear Group America, the US clean-up arm, is also likely to be sold in time after a dispute over legacy contracts was recently resolved.

Cerberus Global Investments, a private equity firm chaired by Dan Quayle, the former US Vice-President, is thought to be interested in the company and has hired Norman Askew, former chief executive of BNFL, as an adviser.

Other interested parties are likely to include Areva, the French nuclear group, and Shaw Group, the Lousiana-based company that is bidding with Westinghouse for the Chinese contract.

Results from BNFL are due to be published in July and are expected to show that the company has reversed the losses that have dogged it since 1999. Last year it reported losses of £303 million but its losses for 2004-05 are likely to be in the region of £150 million.

The company’s four separate businesses are thought to be profitable at the operating level, but the company has exceptional costs of £220 million relating to restructuring and legacy contracts in the US.

BNFL is expecting to make about £150 million of operating profit and resume paying a dividend in 2006.

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