UK Coal plans a fundraising
UK COAL, the biggest coal producer in the UK, is set to ask its shareholders to help raise around £100m to shore up its balance sheet.
The announcement, due this morning, comes as the company seeks to address its pension deficit and a drop in the value of its land.
UK Coal owns roughly 4,000 acres, which it hopes to use for development. It is valued at around £380m, but the company expects that its value could rise as high as £900m when the property market recovers.
Earlier this year, the company posted pre-tax losses of £81.5m for the first half, widening from losses of £9.9m the year before.
UK Coal, which produces around 8m tonnes of coal each year, provides 95 per cent of the coal it produces to four core electricity customers: Drax, EDF, Scottish & Southern and E.ON.
The rights issue is expected to be run by Evolution Securities and Numis Securities.
UK Coal declined to comment last night, saying it would not talk about market speculation or rumour.
The group, which produces about half of the UK’s coal, has a market cap of £189m.