UK Coal – which will now be called Coalfield Resources – completed a difficult and extended restructuring by dividing the company into a mining arm called Mine Holdings and a property division called Harworth Estates.
The sale of 75% of the property portfolio to pension funds was a key element in a complex overhaul which also resulted in widespread changes on the board of directors and in executive leadership positions.
UK Coal chairman Jonson Cox was straightforward about how close the company came to utter collapse.
“This has been a restructuring of unprecedented scale and complexity for this size of company, dealing with a legacy structure that was inherited on the privatization of British Coal in 1994,” he said.
“Without it, it was almost certain that the coal mines would have been unable to trade beyond the first quarter of 2013.”
The restructuring has served to safeguard some 2500 skilled jobs and create a funding plan for the £450 million ($US723.4 million) pension deficit that has burdened the miner.
“The support provided has given a final chance to the mining business, mine management and the workforce to adopt the changes needed to ensure safe, reliable and efficient production for the next five to 10 years,” Cox said.
“While we have successfully reduced deep-mine manpower cost by 12.5 per cent and started to change working practices our inherited cost structure still remains too high and labor productivity too low.
“All surplus cash flow from the mines will go to fund pension deficit for the foreseeable future.”
Leadership changes
Kevin McCullough, currently chief operating officer of British utility RWE npower, will take over as chief executive officer of Mine Holdings in early 2013.
UK Coal director Owen Michaelson will continue as Harworth Estates CEO, effective immediately.
Former Bridon Group finance director Stephen Hutchinson and UK Coal director Gareth Williams will become Mine Holdings’ finance director and managing director, respectively.
Keith Heller, until now an independent non-executive director of UK Coal, has stepped down from the board and taken on the role of a trustee of the employee benefit trust which now controls Mine Holdings.
UK Coal finance director David Brocksom will step down at the end of the year.
