Centrica, the owner of British Gas, is launching a deeply discounted rights issue to raise £2.2 billion to help fund its acquisition of a share in British Energy, the nuclear generator, from its new French owner EDF.

Centrica will use the proceeds to buy 25 per cent of British Energy for £3.1 billion.

Investors in Centrica that taking part in the rights issue on November 14 will receive three new shares for every eight they hold at 160p — nearly half yesterday's closing price of 306.25p.

The discounted price appears to have been necessary to ensure the issue was fully underwritten by the banks. Sam Laidlaw, chief executive of Centrica, said: "The days of paying a large underwriting fee are over.

"The economics of this for our shareholders are the same whether it's a 25 per cent discount or a 50 per cent discount. We are doing this from a position of strength. This is not a recapitalisation like some of the banks; this is a business with an AA-credit rating, performing well."

Mr Laidlaw added that he expected to fund the rest of the issue from debt provided by the same banks that have underwritten the share issue. There could also be asset sales to raise the extra cash.

He said that if Centrica could not reach a deal with EDF, the cash would be used to acquire more of its own supplies of gas.

Since February last year, Centrica has been deliberately buying up its own sources of gas to lessen its dependence on buying wholesale gas at steep market rates at times of shortage.

"British Energy is our plan A," Mr Laidlaw said. "We have been very clear that we haven't yet reached final agreement and the French have to have final approval from the EU."

A trading statement showed that revenues were performing in line with expectations, despite the credit crunch. Mr Laidlaw said that a recent rise in customer defections after a big price rise in July had recently reversed. "We're now starting to see some customers coming back," he said.

EDF is planning to build four European pressurised reactors in the UK and is aiming to have the first reactor on stream by the end of 2017.

The deal to take a stake, agreed in outline with EDF before its acquisition, would allow Centrica to take a 25 per cent share in the costs and profits from building and running the new plants.

The rights Issue is fully underwritten by Goldman Sachs, Credit Suisse and UBS as joint bookrunners, and by HSBC, BNP Paribas, RBS and Barclays Capital as lead managers.

It said the acquisition in combination with the rights issue would be mildly dilutive for earnings per share in the first two years after the deal and neutral in 2011.

The new shares will begin trading on November 24.

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