STOCKS NEWS EUROPE-British Energy falls on reactor problems

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08:32GMT 07Nov2007-British Energy falls on reactor problems

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British Energy BGY.L shares plunge 10 percent after the nuclear power firm says it has discovered a corroded wire in a reactor at its Heysham 1 plant similar to a problem discovered at a Hartlepool reactor last month, and that it is too early to say when four reactors will resume operations after inspections.

"Assuming both stations (Heysham and Hartlepool) are off for the remainder of the financial year, we would expect the loss of around 8 TWh of output, worth around 12.5 pence a share off both value and 2008 estimated earnings," UBS analysts write in a research note.

"The outages are likely to result in increased market share for gas generators and may have a small positive impact on power prices due to tighter margins ... We would expect Drax to react positively on this news."

Shares in Drax, operator of Britain's biggest coal-fired power station, are up over 4.4 percent. For more double click on [ID:nL06245216]

Reuters Messaging: rm://mark.potter.reuters.com@reuters.net 08:30GMT 07Nov2007-European shares higher, miners gain