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British government considers possible BP failure

06 July 2010 15:02 (UTC +04:00)

The talks, led by officials at the British Department for Business and the treasury, will focus on how a corporate failure of BP would affect British interests domestically and internationally and the impact on millions of British retirees, as the vast majority of British pension funds hold a stake in the company.

BP, formerly Britainâ€™s biggest company, more than halved its value since the accident on April 20 and has liabilities of up to $A82 billion, according to estimates by Goldman Sachs.

Prime Minister David Cameron and Chris Huhne, the Energy Secretary, were set to discuss BPâ€™s future with US officials during a trip to Washington on July 20.

The Department for Business declined to comment on the contingency plans, which were believed to still be under discussion but a person familiar with the talks told The (London) Times: â€œIt is not clear how bad this will get, but the government needs to be prepared for any eventuality.â€

â€œWe will recover from this, but there are undoubtedly going to be big changes in the way the company and the industry operate,â€ a spokesman said.

News of the discussions surfaced as BP insisted that it had no plans to issue new shares, either to strategic investors or in the form of a conventional rights issue, despite the huge financial pressure caused by the spill.