Thursday, 8 November 2012

Struggling UK Coal teeters on verge of administration


Management of the miner have warned investors that if, at a shareholder meeting tomorrow they do not back the company's plan to separate its coal and property arms by the end of December, it risks closing for good.

Chairman Jonson Cox is trying to turn around the group, which operates three deep mines in England and employs around 2,500 people.

To ensure its survival, the board wants investors to agree to it moving from a premium to a standard listing on the stock exchange on December 4, which would mean it would be able to make changes without them having to be signed off by shareholders each time.

This should speed up the process of restructuring and also make it cheaper, according to management, who also plan to change the company's name to Coalfield Resources to reflect its changing focus.

The moves come after UK Coal has been beset by production problems at its biggest mine, Daw Mill in Warwickshire. Faced with rising costs, a £430m pension deficit, and a slumping coal price, the company's shares have dropped 80pc since the start of the year.

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