Hargreaves Services in £7.5m Maltby methane deal with Alkane Energy
HARGREAVES Services this week announced it has sold methane assets at its Maltby Colliery operation to Alkane Energy in a deal worth up to £7.5m.
The fuel and logistics group shut the loss-making South Yorkshire deep mine in March on health and safety, geological and financial grounds with the loss of up to 500 jobs.
The deal with Nottinghamshire-based Alkane Energy will see Hargreaves receive an initial payment of £5.5m in cash on completion followed by up to £2m payable six months after the mine shafts have been filled and capped as part of Maltby’s planned closure and restoration programme.
Hargreaves said that it is anticipated that these tasks will be completed during the first half of 2014.
Gordon Banham, chief executive of Hargreaves, commented: “We are pleased to announce this disposal. Alkane is well positioned to maximise the value of these assets and this has created the basis for a deal that is beneficial to both parties. This disposal constitutes an important step towards realising our asset disposal targets for Maltby, which we will seek to continue with the disposal of the underground assets in due course.”
Alkane Energy is the UK’s largest coal mine methane (CMM) producer, involved in the design, build and operation of methane gas fuelled power plants.
It said it will fund the deal through existing bank facilities and a £6m share placing.
Neil O’Brien, chief executive, said: “This latest acquisition consolidates Alkane’s market leading position in CMM and it adds significantly to the group’s core CMM operating capacity and provides an opportunity to further develop our Power Response business. Investor support for the placing demonstrates commitment to Alkane’s growth strategy. We are committed to continue to develop the group as the UK is beginning to see a tighter generating market and rising electricity prices.”
