US utility, TECO Energy, is to sell its coal mining subsidiary, TECO Coal, to Cambrian Coal for US$ 170 million, the company has announced. The sale is expected to close by the end of the year.
TECO began mining coal in the 1970s but now aims to focus on its core utility business, providing electricity and gas to customers in Florida and New Mexico. The sale of TECO Coal will mark its exit from the coal mining industry.
US$ 120 million is to be paid on closing of the deal, with the remaining US$ 50 million contingent on the coal benchmark prices reaching certain levels over the next five years.
As a response to the sale agreement, TECO Coal has issued WARN Act notices to all of its employees to “allow the new owners maximum flexibility in the operations,” the company said in a statement. Under the WARN Act, a mining company is required to provide a 60 day notice period of any potential layoffs.
“When this transaction closes, it will complete a long journey returning TECO Energy to its core utility businesses,” said CEO, John Ramil. “I would like to thank all those who have successfully contributed over the years to positioning our company to completely focus on growing our strong utility operations.”
Cambrian Coal is part of the Booth Energy Group, which owns coal mines in Kentucky, West Virginia and Virginia.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/mining/21102014/world-coal-teco-energy-sells-coal-mining-assets-coal1429/