Coal producer Hargreaves Services has vowed to help safeguard jobs at ATH Resources after buying up the troubled miner’s debt from Better Capital, the private equity firm run by venture capitalist Jon Moulton.
Doncaster-based ATH, which has all five of its open-cast mines in Scotland, fell into administration in December, a month after Better Capital had bought £15 million of its debts.
The private equity firm was thought to be seeking to buy the company outright, but was unable to thrash out a deal amid complex negotiations with customers, land owners and the Scottish Environment Protection Agency. It has now sold the miner’s debt to Durham-based Hargreaves, owner of the Maltby colliery near Rotherham, which is set to close this month.
Hargreaves paid £5m in cash for the debt, which has a face value of £12.5m and is secured over the assets of ATH’s operating subsidiary, Aardvark. Shares in the group jumped 40.5p, or 4.7 per cent, to 895p yesterday.
ATH employs about 330 people, but it is not known how many jobs will be secured under the deal with Hargreaves, which is aiming to lead a restructuring at Aardvark “that allows viable sites to continue to operate”.
Hargreaves’ chief executive Gordon Banham said: “We have been actively seeking our own opportunities to invest in surface mining in Scotland and so we welcome the opportunity to participate in this project.
“Our intention is that our assistance will help to safeguard jobs, and establish our credentials as a key participant in the Scottish mining industry.”
Banham said the firm would also use any profits made on the acquisition of ATH’s debt to help towards “outstanding historic restoration obligations”.
Enterprise minister Fergus Ewing said: “The Scottish Government remains very supportive towards the coal mining industry in Scotland. Any opportunity to preserve jobs during difficult economic times is very positive.
“We are also pleased with any initiative that brings additional focus and funding to deal with legacy restoration liabilities.”
Along with the 100-year-old Maltby deep mine, which is being mothballed with the loss of about 500 jobs, Hargreaves owns the Monckton coke works near Barnsley. The firm was tipped as a potential suitor for ATH in 2011, when the miner announced it was in talks over a possible offer for the company.
Better Capital, which owns double-glazing firm Everest and fashion retailer Jaeger, said it will have no further involvement in any restructuring of ATH’s operations following the sale of its debt.