11 Apr 2014
Following extremely difficult trading conditions, UK Coal is pleased to note the Government’s announcement today of its intention, in principle, to participate in a private sector led consortium that will invest in a managed closure of the business by late 2015.
Negotiations are well underway between a variety of stakeholders including Hargreaves Services, Harworth Estates, the Department of Energy and Climate Change, the Department for Business, Innovation and Skills, the Pension Protection Fund and the combined mining trade unions.
Subject to agreement of detailed terms expected to be concluded in the next few weeks, this joint initiative between commercial organisations and Government will see both Hargreaves Services and Harworth Estates invest £5 million each which will be boosted by a further £10 million from Government in the form of an interest bearing commercial loan. This package will help the company avoid an immediate insolvency and allow the solvent closure of the deep mines and the repayment of the loans.
In recent days, various parties have expressed an interest in potential investment in UK Coal’s surface mines. Every one of these has been explored but, as it stands today, no offers have been made and the proposed deal announced today remains the only option available. However, the managed closure plan of the deep mines will provide sufficient time to consider potential options that have arisen during the process.
Kevin McCullough, Chief Executive of UK Coal, stated “We are pleased that the Government has indicated a commitment to this deal which will give other parties the confidence to conclude their own positions.
“This proposal offers the best opportunities for our workforce, our customers and our suppliers. Without the support to close the business on a phased basis to 2015, we would have been announcing an immediate insolvency and 2,000 job losses. We will work with government departments and agencies to find alternative work, or support, for employees as they leave the business over the next eighteen months.
“Regrettably, the historically low international coal price and a strong pound, mean our costs are too high to sustain an ongoing business and this is the only option available to the business.”
Story appears courtesy of UK Coal.