ATH sheds regeneration to concentrate on mining

COAL miner ATH Resources has sold its regeneration business to a newly-formed company RecyCoal, headed by ATH's chief executive Tom Allchurch.

Doncaster-based ATH said proceeds from the disposal could total 17m over a seven- year period.

ATH has sold the business for 6.5m in cash, plus up to 8m of royalties and a final payment of 2.5m from the sale of land at the Langton site in Nottinghamshire, which is due in 2013.

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ATH will incur a loss on disposal of 800,000, after tax and goodwill are written down by 2.3m.

The shareholders of RecyCoal, who include Mr Allchurch and finance director Steven Beaumont, have committed 40m to the development of the new firm.

Chairman David Port said: "The disposal of the ATH Regeneration assets will reduce debt and allow the group to focus on its surface mining business without having to raise the significant amounts of capital necessary to fully exploit the regeneration business."

For the year to October 4, ATH Regeneration had no sales and made an operating pretax loss of 2.4m.

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ATH's managing director Alistair Black, who has been running the group's other division – surface mining – is to take over as chief executive.

Non-executive chairman Mr Port is stepping up to the executive chairman's role on a temporary basis.

Mr Beaumont is to continue as finance director during a period of transition and Mr Allchurch will become a non-executive until the handover is complete.

Mr Port welcomed the sale, saying that the regeneration business did not fit in with the surface mining business.

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"It has provided no income since 2008 and it has become a drain on the PLC. We can't develop the business and still pay a dividend."

ATH is keen to focus on surface mining and stick to a formula whereby it produces around two million tonnes of coal a year and rewards shareholders with regular dividends.

It has a team in Doncaster on the look-out for new opportunities to buy new mines to replace exhausted ones.

Mr Allchurch said the tip washing and reclamation plant at Langton would be up and running in the next few weeks.

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"We are looking at other sites, " he said. "There are a couple of projects we're looking at in Yorkshire and a couple of others elsewhere in the North. It will be four to five months before we can say."

Analyst Charles Kernot at Evolution said: "With the proceeds of the disposal being used to reduce debt, ATH's balance sheet structure will improve."

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