UK Coal Operations Limited – restructuring preserves nearly 2,000 jobs
Published at 13:04 PM on 09 July 2013
David Kelly, Robert Hebenton, and Ian Green of PwC were appointed joint administrators of UK Coal Operations Limited (the Company) on 9 July 2013. The appointment was made by Birmingham High Court on application by the directors of the Company.
Immediately following the appointment, the administrators completed a restructuring of the majority of the Company’s business and assets to a new company called UK Coal Production Limited and its trading subsidiaries, which include, UK Coal Kellingley Limited, UK Coal Thoresby Limited and UK Coal Surface Mines Limited.
Nearly 2,000 jobs across the whole group have been preserved by the wider restructuring, including 120 former Daw Mill miners. Regrettably, there will be 280 job losses at Daw Mill and we are in the process of notifying those affected whom the company has previously served with redundancy notices. Since the fire, nearly 90 Daw Mill employees have worked their notice period and left the Company prior to the administration appointment.
As part of the restructuring the administrators were able to protect around 1,500 Company jobs and secure on-going production by agreeing a compromise with major creditors, including the defined benefit pension schemes and the Pension Protection Fund (“PPF”). Over 400 jobs will also be preserved as part of the wider restructuring under a separate insolvency process.
UK Coal Production Limited and its trading subsidiaries will not be owned by the PPF, but the PPF will retain economic benefit through substitute debt instruments. Negotiations are on-going for the sale of the interests of the shares of UK Coal Mining Holdings Limited, a new holding company for UK Coal Production Limited and its trading subsidiaries, to an Employee Benefits Trust. An announcement will be made in due course.
David Kelly, joint administrator and PwC partner, said:
"Despite the intense pressures that the Companies have been under following the catastrophic fire at Daw Mill in February 2013 and the confirmation of the Daw Mill mine closure in March 2013, 2,000 jobs have been preserved by the restructuring including 120 former Daw Mill miners, which also guarantees continued supply of electricity to the UK and keeps the lights on.
“The impact of the Daw Mill fire could not have been predicted and led to major losses for UK Coal. Since then, the management team and key stakeholders have been working to find a solution to save the business, and this would not have been possible without the support of the Pension Protection Fund, customers, suppliers, all parts of government, unions, employees and their families.
“This deal represents the best outcome for the creditors who would have lost virtually everything if operations had ceased trading”
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