27th Feb 2007 07:05
UK Coal PLC27 February 2007 27 February, 2007 UK COAL PLC ("UK COAL") Sale of Maltby Colliery UK COAL announces that its subsidiary, UK Coal Mining Limited ("UKCML") hastoday completed the sale of its deep mine operations at Maltby Colliery ("Maltby"), together with a transfer of operational assets and liabilities to arecently incorporated company, Maltby Colliery Limited ("MCL"), which is part ofthe Hargreaves Services plc ("Hargreaves") group of companies. The total cash consideration paid on completion was £21.5 million, subject toany post-completion adjustment in respect of surface coal stocks held at Maltby,and will give rise to a profit of some £13 million. The book value of Maltby'sgross assets was £15.8 million as at 31 December, 2006. Maltby, located near Rotherham in South Yorkshire, last year producedapproximately 750,000 tonnes of coal and recorded an operating loss of some£18.2 million on turnover of some £32.7 million. The mine employs around 470people, who will now transfer to MCL. Maltby has had a long-established relationship with Hargreaves, which has beenthe mine's second largest customer and is the UK's largest independent producerand distributor of coke products. The metallurgical coal which Maltby producesis ideally suited to Hargreaves' needs. The proceeds of the sale will be usedto reduce borrowings. In order to facilitate the sale of Maltby, UKCML's coal supply contract with oneof its customers, Drax plc, has been varied by mutual agreement to deletereference to Maltby Colliery as a specified point of supply. Gerry Spindler, Chief Executive of UK COAL, said: "This is a sale that benefitsall parties. Hargreaves is a major player in the solid fuel market and Maltbywill fit comfortably with its business of producing quality smokeless fuels andin fuel distribution. It will promote the production lifetime and the securityof employment at Maltby. For UK COAL, it secures a profit on disposal andenables us to focus on our core deep mining activities, whilst decreasingoperational risks and, in parallel, continuing to develop our expanding propertybusiness." Gordon Banham, Chief Executive Officer of Hargreaves, said: "We are delighted tohave reached this agreement with UK COAL. This is a unique opportunity for usto acquire a well established British coking coal mine which is an ideal fitwithin the Hargreaves range of services. The acquisition will safeguard thejobs of the approaching 500 employees who work there and I am delighted to takeMaltby forward as part of the enlarged Hargreaves group." - Ends - Enquiries: UK COAL PLC Tel: 01302 751 751Gerry Spindler, Chief ExecutiveChris Mawe, Finance Director Mobile: 07778 780 884 MediaCitigate Dewe Rogerson Tel: 020 7638 9571Anthony Carlisle Mobile: 07973 611 888Laure Lagrange Tel: 020 7282 1056Brett Jacobs Tel: 020 7282 2971 Hargreaves Services plc Tel: 0191 373 4485Gordon Banham, Chief Executive OfficerPeter Dillon, Financial Director MediaBuchanan Communications Tel: 020 7466 5000Diane StewartTim Anderson This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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