Peel lends £10m as UK Coal weighs up merger
BRITAIN’S largest coal miner UK coal today announced that it was still assessing a merger approach.
The group, part-owned by Manchester’s Peel Holdings, announced in March that it had been approached by mining group Hargreaves Services.
A deal would represent a tie-up which could mitigate the negative effects of UK Coal’s exposure to deep mines.
In its interim management statement, UK Coal said: “On March 9, following press speculation, we announced that we had received a very preliminary approach regarding a potential merger transaction.
“The matter remains at an early stage and we would continue to stress that there is no certainty that a transaction will result.”
The Doncaster-based group also said it had taken on a £10m loan facility from property giant Peel which holds 28%. It has also arranged a £20m increase in its banking facilities.
The group also reported net debt of £236m of which generator balances were £77.4m at the end of the first quarter. The figure includes generator loans/prepayments but excludes restricted cash balances.
Production in the first quarter was 1m tonnes compared to 1.7m in 2009, of which 0.8m tonnes was from deep mines, compared to 2009’s 1.4m tonnes, and 0.2m tonnes was from surface mines.
UK Coal manages around 46,500 acres through its Harworth Estates division. Much of this land is on the site of former collieries in Yorkshire and the North East.
However, it is developing a 1,000-acre site at Cutacre, Bolton, part of which is ear-marked for a mixed-use business park. Peel Holdings is also working with the group on the development of windfarms on its land.
