ATH in restructure warning to investors

The Doncaster-based company, which runs five mines in Scotland, has appointed Deloitte as an adviser after saying it is unlikely to attract the level of capital required to continue operating without a restructure.

Earlier this month, the group said it is reviewing its operations after falling coal prices damaged its prospects.

Its immediate focus is securing funds to mine existing sites and extensions as a deadline approaches on renewing its banking facilities.

Yesterday the group said Deloitte will advise on all its restructuring operations and will help the group to assess proposals from possible buyers or investors.

In a statement yesterday, ATH said: “Given the level of liabilities within the company, it is unlikely that shareholder value will be maintained following any possible restructuring.”

The shares, which were languishing at 2.87p, closed down 1.5p to 1.37p, a fall of 52 per cent, giving the company a market capitalisation of £550,000.

Possible outcomes could include a sale, closing mines or a cash injection from an investor.

The group’s net debt stands at around £22m.

As well as weaker coal prices, the miner has been hit by rising fuel costs and tough geology.

The group’s banking facilities with HSBC and Yorkshire Bank expire in May 2013.

The miner shrunk its facilities from £23.5m to £18m during the year, but said it must increase this level to meet its operational needs from December onwards.

The company is 20 per cent owned by Swedish value investor Peter Gyllenhammar. Other major shareholders include Axa Framlington Investment Management and Close Asset Management.

China’s slowing growth and the weak global economy have driven coal prices about 30 per cent below a year ago.

ATH said it sees little prospect of improvement in the medium term.