UK Coal completes overhaul

UK Coal, which was renamed Coalfield Resources, has split its operations into two businesses - a mining arm called Mine Holdings and property division Harworth Estates.

Ownership of the South Yorkshire-based group has been broken up between the company, a newly established Employee Benefit Trust and the Pension Fund.

Under the restructuring, the Pension Fund now owns 75 per cent of Harworth Estates, which has 30,000 acres of land and other property, in return for a £30m cash injection.

The company, which generates about 5 per cent of Britain’s electricity requirements, slumped to a loss in the first half of the year as production at its Daw Mill mine near Coventry plunged.

Chairman Jonson Cox said: “The restructuring has helped to safeguard 2,500 highly skilled and well-paid jobs, a skilled supply chain, and created a funding plan for the £450m pension deficit that UK Coal has been burdened with.”

The group also saw several changes among its board of directors as part of the shake-up, including the appointment of RWE Npower’s chief operating officer as chief executive of Mine Holdings.

The group’s other deep mines are at Thoresby in Nottinghamshire and Kellingley in North Yorkshire.

It previously warned it was “unlikely” that Daw Mill, which employs 800 staff, would continue to operate beyond early 2014.

Mr Cox said: “This has been a restructuring of unprecedented scale and complexity for this size of company, dealing with a legacy structure that was inherited on the privatisation of British Coal in 1994.

“I’m delighted that we’ve succeeded in completing it. Without it, it was almost certain that the coal mines would have been unable to trade beyond the first quarter of 2013.”

Control of Mine Holdings has passed to a newly established “Employee Benefit Trust”, which holds shares representing 67 per cent of the voting rights.

Among board changes, finance director David Brocksom will step down on December 31 although he will continue to remain available under contract for some months to ensure a successful transition.

And Owen Michaelson has stepped down as a director of the company to become the chief executive of Harworth Estates with immediate effect.

Mr Cox will remain chairman of the company and will also chair Harworth Estates and shareholder meetings of the mining business.