UK Coal’s shareholders voted overwhelmingly in favour of a restructuring package designed to save the company from collapse.
Over 99 per cent of shareholders voted for a transfer to a standard listing and a change in name to Coalfield Resources.
The Doncaster-based company, which has three working deep mines, a number of surface mines and vast portfolio of former pit land, is rich in resources but burdened by debt.
UK Coal said the vote was a key step to implementing the restructuring, although considerable work remains to complete it on schedule in December 2012.
In a trading update yesterday the group said total production in the third quarter was 1.6m tonnes, down from 1.8m tonnes in the same period last year, making year to date production 4.9 million tonnes, down from 5.9 million tonnes in 2011.
Chairman Jonson Cox said that while the Kellingley and Thoresby mines had operational difficulties, the main issues encountered in the third quarter were at Daw Mill. He added that significant steps are being made to improve safety standards across the business and work continues with employees and trade unions to improve working practices and conditions.
The Lost Time Accident Rate for the third quarter was 20.44 per 100,000 manshifts, representing a 23 per cent improvement on the previous year.
Operational difficulties and the fall in global coal price have added to the pressure for the group to complete its restructuring in December.
The restructuring is a complex process and still requires the final approval of third parties and regulatory clearances. The group said one important milestone is the clearance statement from the Pensions Regulator.
The company said significant progress has also been made in finalising the other relevant documents and obtaining the required clearances.
“Today’s approval of the resolutions 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 December 4,” said Mr Cox.
If the restructuring is not completed, the company expects the covenants of the group’s bank facilities will be breached at the December 2012 test date.
This would cause the terms of the group’s bank facilities to be breached which could result in the bank facilities becoming repayable in the first quarter of 2013.