Interim Management Statement

RNS Number : 3335Q

UK Coal PLC

05 November 2012

 



5 November 2012

UK Coal PLC ("UK Coal")

Interim Management Statement and Results of General Meeting

UK Coal today issues its Interim Management Statement for the period 1 July to 5 November 2012 incorporating a trading statement for the third quarter ended 29 September 2012.

Results of General Meeting

UK Coal announces that at its General Meeting, being held at its Head Office in Harworth, near Doncaster, shareholders have approved resolutions by an overwhelming majority to transfer the company's listing category from premium to standard and to change its name to 'Coalfield Resources plc' on completion of the restructuring, in each case by a majority of over 99.8 per cent of votes cast, discounting abstentions. 

This is a key step to implementing the restructuring, although considerable work remains to complete the restructuring on schedule in December 2012.

Safety

Significant steps continue to be made in improving safety standards across the business and work continues with employees and Trade Unions to improve working practices and conditions across all parts of the business.

The Lost Time Accident Rate for the third quarter is 20.44 per 100,000 manshifts (Q3 2011: 26.67 per 100,000 manshifts), representing a 23% improvement on the previous year.

Production

Total production in Q3 was 1.6m tonnes (Q3 2011: 1.8m tonnes) making year to date production 4.9m tonnes (YTD 2011: 5.9m tonnes).  While Kellingley and Thoresby were not without operational difficulties, the main issues encountered in Q3 were, and continue to be, at Daw Mill.

As previously announced regarding Daw Mill, and as a result of safety concerns, the decision has been taken to put 32s into salvage before moving the equipment to 33s.  This panel remains on plan for a Q2 2013 start date.  Operational difficulties, which arise from the layout of the panel in 2009 and poor geological conditions, continue on 303s face.  These difficulties are reducing the output rates below what was expected, although it is still anticipated that the last coal will be cut from this face before 33s is ready.

Property Sales

During the third quarter, property disposals of £6.5m were achieved (Q3 2011: £4.1m). 

Sale of Harworth Power

As previously announced, UK Coal completed the sale of Harworth Power after the end of the third quarter on 1 October 2012 to Red Rose Infrastructure Limited for a consideration of £20.3m, of which £20m was paid on completion with the remaining £0.3m deferred.

Debt

Total net debt (including generator loans but excluding restricted funds) at 29 September 2012 was £134.0m (31 December 2011:  £138.8m).

Net bank debt (excluding restricted funds) at 29 September 2012 was £70.8m (31 December 2011: £54.7m).

Coal Prices

We continue to monitor the coal market, given the impact of price movements on our floating priced contracts, and note the continued overall decline in the market price.

Restructuring

Operational difficulties referred to above and the fall in global coal price, have added to the pressure for the group to complete the restructuring in December.  Until the restructuring has been completed, the Group's financial headroom remains limited.

The restructuring is a complex process and still requires the final approval of some third parties and certain regulatory clearances.  One important milestone has been receipt of a clearance statement from the Pensions Regulator in relation to the restructuring.  Significant progress has also been made in finalising the other relevant documents and obtaining the required clearances. 

Today's approval of the resolutions set out in the circular issued to shareholders on 18 October 2012, means that UK Coal will now enter the final stages of the process and will look to implement the restructuring as soon as possible following the transfer to standard listing which is anticipated to become effective on 4 December 2012. 

As previously announced, if the restructuring is not completed, the Company's current expectation is that the covenants of the Group's bank facilities will be breached at the December 2012 test date causing the terms of the Group's bank facilities to be breached which, in the event that a waiver of these covenants cannot be obtained, would result in the bank facilities becoming repayable in the first quarter of 2013.

Other than the information contained in this Interim Management Statement, there have been no material events or transactions in the period which have affected UK Coal and its financial position.

-End-

Enquiries:

Analysts and investors

Jonson Cox                         Chairman                                            Tel: [phone]

David Brocksom               Group Finance Director                 Tel: [phone]

Media

Anthony Cardew              Cardew Group                                   Tel: [phone]

Alexandra Stoneham     Cardew Group                                   Tel: [phone]

Andrew Mackintosh       Director of Communications      Tel: [phone]

 

END

 

 

IMSEAFFSELDAFFF