THE fate of Britain’s biggest coal mining firm could be decided today.
Shareholders in Doncaster-based UK Coal are due to meet this morning to vote on one of the most complex corporate restructurings Yorkshire has seen in recent years.
If the restructuring isn’t approved by the end of the year, bosses at UK Coal have warned that the company could go into administration.
With its three working deep mines, handful of surface mines and vast portfolio of former pit land, the company is rich in resources but burdened by debt.
Its pension obligations dwarf the company’s value on the stock market.
Jonson Cox, the turnaround expert who led Yorkshire Water into its takeover by Kelda, and overhauled Anglian Water, was called in as chairman in late 2010 to revive UK Coal.
In August, after months of protracted negotiations, Mr Cox unveiled details of a turnaround plan.
Mr Cox believes these proposals offer the only sustainable future for the company.
Mr Cox told the Yorkshire Post in September: “It’s a very complex restructuring for what’s quite a small company, and it reflects the economic nature of the industry.”
The complex plan is effectively a debt-for-equity swap with its pension funds, which support almost 10,000 current and former miners.
In October, UK Coal said almost half of its shareholders had so far backed plans to change its listing from premium to standard, which is a key part of the restructuring process.
Four shareholders have backed the change with their combined 46.4 per cent stake, ahead of today’s vote.
UK Coal also plans to change its name to Coalfield Resources, to reflect its changing focus.
In a statement issued to investors last month, UK Coal said: “If the company fails to reach legally binding agreements with its stakeholders, and, therefore, the restructuring is not implemented by December 31, 2012, the company may no longer be able to trade as a going concern and this would likely result in the appointment of receivers, liquidators or administrators as early as the first quarter of 2013.”
Thirty per cent of the UK’s electricity generation came from coal last year, compared with just nine per cent from renewables.
UK Coal supplied eight million tonnes of coal in 2011, which is about 16 per cent of the coal burned in the UK last year and five per cent of the UK’s electricity needs.
UK Coal’s combined reserves and resources at surface and deep mines total almost 280m tonnes.