David Kelly, Robert Hebenton, and Ian Green of PwC were appointed joint administrators of UK Coal Operations Ltd. on 9 July 2013. The appointment was made by Birmingham High Court on application by the directors of UK Coal Operations. 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 Ltd and its trading subsidiaries, which include UK Coal Kellingley Ltd., UK Coal Thoresby Ltd. and UK Coal Surface Mines Ltd..
The restructuring has preserves almost 2000 jobs, including 120 former Daw Mill miners. Daw Mill, previously scheduled for closure in 2014, was struck by a devastating fire in February 2013, costing UK Coal Operations an estimated £300 million. The North Warwickshire mine was one of the last deep coal mines in the UK, and produced 2.2 million t of coal in 2012.
PwC announced that, “Regrettably, there will be 280 job losses at Daw Mill. 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 worked their notice period and left UK Coal Operations, before the administration appointment.”
As part of the restructuring, the administrators were able to protect around 1500 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 Ltd. and its trading subsidiaries will not be owned by the PPF, but the PPF will retain economic benefit through substitute debt instruments. There are on-going negotiations for the sale of the interests of the shares of UK Coal Mining Holdings Ltd., to an Employee Benefits Trust.
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 and the confirmation of the mine closure in March 2013, 2000 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.”
Adapted from press release by Samuel Dodson.
Read the article online at: https://www.worldcoal.com/coal/09072013/2000_jobs_saved_at_uk_coal_operations_ltd_260/