Wed, 10 Jul 2013 | ADMINISTRATION
A rescue deal for UK Coal Operations has been agreed by the company's administrators.
PwC took over the running of the business earlier this month but it was always thought that the firm would enter a pre-pack administration. Now a deal has been confirmed that will see 2,000 jobs preserved.
Miners' pensions will, however, be cut in the agreement, which will see the firm's £543 million pension liability passed on the Pension Protection Fund (PPF).
Kevin McCullough, chief executive of UK Coal, said that he had “mixed emotions” about the deal: “Entering administration and the subsequent restructuring was the only way we could preserve any of the business.”
Under the agreement, PwC will transfer the mines across to a new holding company, UK Coal Production, while PPF will control the business through secured loans. While the arrangement will keep some of the UK's last remaining deep mines open, one, Daw Mill, in Warwickshire, will be closed after a fire and years of production problems meant that the operation was unable to pay its bills. The Coal Authority will take control of Daw Mill and the taxpayer will pick up the cost of closing it down, along with the redundancy payments for its 280 workers.
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UK Coal Operations to be rescued in pre-pack deal
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