UK Coal starts assets sale with £20m power generator disposal
DAW MILL pit owner UK Coal has sold subsidiary Harworth Power (Generation) in a £20m deal.
The business has been sold to Red Rose Infrastructure which is operated from Birmingham by asset manager Capital Dynamics.
On its website Colmore Row-based Capital Dynamics states that it help clients achieve global exposure through comprehensive investment strategies ranging from large to small buyout, growth and venture capital, and specialty strategies such as secondaries and direct investments.
Harworth Power generates power from coal mine methane and has assets at UK Coal’s Kellingley, Thoresby, Harworth and Stillingfleet mines. The power is either used on site by UK coal or exported to the national grid.
Last year, the business had an operating profit of £2.4m on revenues of £5.5m.
UK Coal – which runs the last pit in the West Midlands at Daw Mill in Warwickshire – saw coal production drop by a third in the first quarter of 2012.
It is in the process of going through a major overhaul which will see some assets sold as it tries to reduce borrowing and improve the company’s capital position.
Details of the Harworth Power deal emerged as UK Coal held its annual general meeting on Friday.
Meanwhile, UK Coal believes it is close to an agreement over plans for a major restructure.
The company said it is “confident” that it could reach deals with its banks, customers and the Coal Authority while “considerable progress” has been made over proposed changes to its pension scheme.
Earlier this year the Doncaster-based firm announced it was looking to change the structure of the company as well as its funding and debt structure.
Updating shareholders, chairman Jonson Cox said there would be “further work” on the pensions issue in the coming weeks.
He also confirmed production had recovered after problems in the first quarter but warned that falling coal prices had meant all mines had been set new efficiency targets.
