Sale of Monckton

UK Coal PLC 17 June 2005 17th June 2005 UK COAL PLC Sale of Monckton Coke & Chemical Company Limited The Board of UK COAL plc ('UK COAL') is pleased to announce that it has today completed the sale of its wholly owned subsidiary, Monckton Coke & Chemical Company Limited to Hargreaves (UK) Limited. The total consideration for the sale is £12 million (subject to a pound for pound working capital adjustment), consisting of cash. £8 million is payable on completion of the sale and two further sums, each of £2 million, are payable on the first and second anniversaries of completion. UK COAL expects to realise a profit on disposal of approximately £0.4m. The proceeds of the sale will be used to enhance UK COAL's core mining and other commercial activities. As part of the agreement, UK COAL has also entered into a long-term contract to supply coal at market prices to Monckton for the production of coke. The coal will be supplied from Maltby Colliery, near Rotherham. Monckton was acquired by UK COAL in 1994. The Company manufactures around 200,000 tonnes per annum of high quality coke and associated by-products from its facility on a 35-acre site at Royston, South Yorkshire and sells its products into the specialist industrial and domestic markets both in the UK and abroad. The operation employs 105 people. In the year ended 31 December 2004, Monckton achieved sales revenues of £19.8 million and profits before tax of £0.2 million. The book value of Monckton's net assets, including inter-company indebtedness, was £0.7m as at 31 December 2004. Gerry Spindler, Chief Executive of UK COAL, said: 'Hargreaves is a major player in the solid fuel market and the production facilities at Monckton will fit comfortably with its expanding role in fuel distribution. The sale has been completed at a value reflecting relatively high prices across the energy spectrum, and will enable UK COAL to focus on its mining and other business activities, whilst maintaining an ongoing commercial relationship with the supply of coal for coke production.' For further information: UK COAL PLC Financial Ken Cronin Tel: 0207 554 1400 Mobile: 07887 591 499 Operational Stuart Oliver Tel: 01525 381759 Mobile: 07774 231178 This information is provided by RNS The company news service from the London Stock Exchange