UK Coal in talks with creditors to stay solvent after Daw Mill closure

1 May 2013 (Last Updated May 1st, 2013 18:30)

UK Coal is holding talks with creditors to remain solvent, a plan which could save nearly 2,000 jobs, following the shutdown of the company’s largest colliery earlier this year.

Daw Mill

UK Coal is holding talks with creditors to remain solvent, a plan which could save nearly 2,000 jobs, following the shutdown of the company's largest colliery earlier this year.

Daw Mill was closed in March and 650 workers were made redundant following a major fire. The mine had been operating for 47 years.

In February, the company said that the fire at the facility in north Warwickshire could affect the viability of its complete operations unless it received outside aid from creditors or government, reports Reuters.

The company refused to deny a recent report in The Financial Times which stated that UK Coal is seeking a voluntary liquidation, and is planning to hand over its remaining mining operations to a new company.

According to a statement released by the company clarifying its position, it remains positive that it has an underlying profitable business.

UK Coal chief executive Kevin McCulloch said, "I hope we are close to securing a way forward for our remaining mines. There will undoubtedly be some difficult decisions as we have had to look at all possible options."

The Financial Times reported that the company's liquidation proposal means that creditors will receive £0.32 for every pound of debt, with four power generators who had paid for coal production in advance among the principal losers.

In December last year, UK Coal, part owned by Coalfield Resources, carried out a major debt restructuring programme with shareholders in order to avoid a debt default and shutdown of its operations.


Image: The shutdown of Daw Mill Colliery resulted in the loss of 650 jobs. Photo: Snowmanradio.

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