DISPOSAL OF INTEREST IN COAL4

RNS Number : 3516M

UK Coal PLC

28 January 2009

 



28 January 2009

UK COAL PLC

DISPOSAL OF INTEREST IN COAL4ENERGY LIMITED

UK Coal PLC ('UK Coal' or the 'Group') today announces that its wholly-owned subsidiary, UK Coal Mining Limited, has completed the disposal of its 50% interest in Coal4Energy Limited  ('Coal4Energy')  (the 'Disposal') to its joint venture partner, Hargreaves Services PLC ('Hargreaves') for a total cash consideration of £9.0m, payable in full on completion.

Coal4Energy markets and sells domestic and industrial coal produced by the Group and coal supplied by Hargreaves. The net profit to the Group from the Disposal is estimated to be around £7.0m, and the proceeds will be used to reduce borrowings and fund investment. The Disposal is not expected to have a significant impact on the Group's operations. 

UK Coal Mining Limited has also today agreed to continue supplying circa 250,000 tonnes per annum of certain coals for the domestic and industrial market to Coal4Energy Limited under a new exclusive, five year supply agreement.

Coal4Energy contributed £0.5m to the Group's profit before tax for the year to December 2007 and £0.6m to the Group's unaudited profit before tax for the 6 months to June 2008., The investment in Coal4Energy was shown in the Group's balance sheet at £0.3m at December 2007 and £1.0m at June 2008. The estimated book value of the gross assets of Coal4Energy on completion is approximately £19.0m of which the Group's 50% share is approximately £9.5m.

Jon Lloyd, Chief Executive of UK COAL, said: 'This is a good deal for both parties. Coal4Energy is an attractive business; but it is not core for us, and its future prospects will continue unaffected. For us, the disposal price is attractive, we continue to supply the coal, and we reinforce our ability to invest in our core mining business.' 

For further information please contact:

Media:

Anthony Carlisle, Citigate Dewe Rogerson

Tel: [phone] Mobile: [phone]

Analysts and investors:

Jon Lloyd (Chief Executive, UK COAL)	Tel: [phone]
David Brocksom (Finance Director, UK COAL)	Tel: [phone]
Nick Cox-Johnson (Citigate Dewe Rogerson)	Tel: [phone]

 

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