Daw Mill owner confirms it is to carry out fundraising for mines operation
COALFIELD Resources – owner of Daw Mill Colliery in Warwickshire – has confirmed that it expects to carry out a fundraising to cover the costs of its creation out of the former UK Coal business in the next few months.
The group’s main asset since it restructured in December is a 24.9% shareholding in Harworth Estates Property Group which chairman Jonson Cox said is performing well when he spoke to shareholders at its annual general meeting yesterday.
Mr Cox reported that Harworth Estates, which is jointly owned with the industry-wide pension funds, owns or manages 30,000 acres across 160 sites.
He said Harworth had continued its success in selling land for housing at its Waverley site, between Sheffield and Rotherham, for the next phase of what will eventually be around 3,600 new homes.
At the adjacent Advanced Manufacturing Park, Rolls-Royce, Boeing and the University of Sheffield all currently have buildings under construction under the current phase development.
Opportunities were being progressed at many of the other sites in the portfolio, and in improving rental returns, and the board of Harworth Estates was confident of delivering against the business plan.
Following the restructure, CfR has retained only a minority interest in its former coal mining operations, now part of UK Coal Mine Holdings.
CfR is not involved in running the mines and now has a governance role alongside the employee benefit trust which controls the mining operation.
Chairman Jonson Cox told CfR’s annual general meeting yesterday that no economic return had been expected from the mining investment with CfR’s interest ranking behind that of the industry wide pension schemes.
Mr Cox said that the catastrophic fire at Daw Mill which had severely hit the mining operation confirmed that the decision not to recognise any further value from the mine had been the correct decision to take.
He said that following the closure of Daw Mill CfR had offered full assistance to the management of UK Coal Mine Holdings as it sought a way forward for the remaining mines and 2,000-strong workforce.
Mr Cox said he understood that the discussions over the future for the mines were nearing a potential solution and that it was possible that an announcement could be made by the mining company within the next week.
He reminded shareholders that CfR retained certain liabilities from the restructuring in December 2012 which had been due to be met by UK Coal Mine Holdings which had included professional fees incurred in the 2012 restructuring of around £3.5m.
In view of the current difficulties of the mining business, as previously announced, CfR has secured a bank facility to meet and settle these liabilities.
The banking facility had been granted on the basis of a limited guarantee to Lloyds from the company’s largest shareholder, the Peel Group, and also on the basis that the company would carry out an equity fundraising to repay the facility.