Power firms to recoup £2bn from TXU

POWER companies and banks owed £2.5bn in the collapse of TXU, the American owner of the former Eastern Electricity, are set to get back around £2bn, it was announced today.

Accountants and lawyers who have masterminded the return to creditors will share around £100m for their efforts.

Ernst & Young, administrators to TXU's UK operating companies, said today that Drax - the Yorkshire power station which almost went bust following the demise of TXU - Scottish & Southern Energy and International Power, should share in a £1.7bn payout from claims they were left high and dry in power supply contracts to TXU.

The return represents around 80p in the pound and TXU bankers are set to receive another £300m from negotiations with TXU's joint administrator KPMG.

The payouts are far better than originally thought after TXU collapsed with £2.5bn of liabilities during the electricity price crisis of 2002.

Much of the money - around £1.3bn - was raised when German-owned Powergen bought TXU's 5.5m customers in eastern England and in the North-West. Administrator Alan Bloom said he expects to make the first tranche of payments of £1.3bn from January.

Joint administrator Jim Tucker of KPMG said: 'The administration is one of the most complex in the UK in recent years. Payments could have been delayed for years.'