Business
Sale of Maltby Colliery
Sale of Maltby Colliery.
About this update from Harworth Group Plc
[{"type":"text","content":"\n UK Coal PLC\n27 February 2007\n\n27 February, 2007\n\n\n\n\n UK COAL PLC ('UK COAL')\n\n Sale of Maltby Colliery\n\n\nUK COAL announces that its subsidiary, UK Coal Mining Limited ('UKCML') has\ntoday completed the sale of its deep mine operations at Maltby Colliery \n('Maltby'), together with a transfer of operational assets and liabilities to a\nrecently incorporated company, Maltby Colliery Limited ('MCL'), which is part of\nthe Hargreaves Services plc ('Hargreaves') group of companies.\n\n\nThe total cash consideration paid on completion was £21.5 million, subject to\nany post-completion adjustment in respect of surface coal stocks held at Maltby,\nand will give rise to a profit of some £13 million. The book value of Maltby's\ngross assets was £15.8 million as at 31 December, 2006.\n\n\nMaltby, located near Rotherham in South Yorkshire, last year produced\napproximately 750,000 tonnes of coal and recorded an operating loss of some\n£18.2 million on turnover of some £32.7 million. The mine employs around 470\npeople, who will now transfer to MCL.\n\n\nMaltby has had a long-established relationship with Hargreaves, which has been\nthe mine's second largest customer and is the UK's largest independent producer\nand distributor of coke products. The metallurgical coal which Maltby produces\nis ideally suited to Hargreaves' needs. The proceeds of the sale will be used\nto reduce borrowings.\n\n\nIn order to facilitate the sale of Maltby, UKCML's coal supply contract with one\nof its customers, Drax plc, has been varied by mutual agreement to delete\nreference to Maltby Colliery as a specified point of supply.\n\n\nGerry Spindler, Chief Executive of UK COAL, said: 'This is a sale that benefits\nall parties. Hargreaves is a major player in the solid fuel market and Maltby\nwill fit comfortably with its business of producing quality smokeless fuels and\nin fuel distribution. It will promote the production lifetime and the security\nof employment at Maltby. For UK COAL, it secures a profit on disposal and\nenables us to focus on our core deep mining activities, whilst decreasing\noperational risks and, in parallel, continuing to develop our expanding property\nbusiness.'\n\n\nGordon Banham, Chief Executive Officer of Hargreaves, said: 'We are delighted to\nhave reached this agreement with UK COAL. This is a unique opportunity...