UK COAL plans to split itself in two as part of a restructuring deal with pension trustees and customers to whom it owes millions.
Britain’s biggest coal producer said it had reached an agreement with key stakeholders as it unveiled a £20.6 million loss during the first half of the year. It made a £22.2m profit in the first six months of 2011.
Poor performance at two of its mines hindered production, with revenues down 23 per cent.
UK Coal owes its customers and banks £138.3m and has a pension funding deficit of about £430m. It said yesterday that creditors would extend a £90m support package up to the end of 2015.
The restructuring plan includes splitting the company’s mining and property businesses, with the property business used to service the company’s bank debt.
The mining business will assume a majority of the group’s pension liabilities. Pension funds will receive £30m annually plus any cash in the mining business from 2014.
Numis Securities analyst Howard Seymour said the proposals, which require shareholder approval, looked “sensible”.
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