It is one of the worst kept secrets in the industry that BE is looking to build new power plant. They have a problem in that they own the property but do not have enough money to buy houses or hotels. They have asked the bank (the government) who having bailed them out once has stated that they need to get some different private equity involved.

So BE being smart has asked a few other players if they would be prepared to invest in these new builds, recognising that the game would be a dull one without BE and also that some of the property is likely to be re-valued in the future due to the LCPD. The talks have been surprisingly open. The difficulty with the talks is that BE would own and build their hotels, they would effectively enter a long term power deal with the other players (the equivalent of reduced rent). This kind of deal is good in the short term because it bails BE out of a problem, but the long term is sacrificed to other players.

So why do BE not ask some banks for this kind of deal, because it is easier to borrow money on a steady cash stream and this would mean acquiring a supply business or entering into a long supply deal. BE's reputation in supply is quite good as long as you are a baseload client and don't mind little or no trading. Times have moved on and the cost of flexibility is valued by all.