UK Coal entered into a conditional Sale Agreement with ABN AMRO Rothschild to sell its 75,572,049 shares in Gloucester Coal for $52.1 million, before transaction costs, to be paid in cash.

The disposal of Gloucester Coal is expected to be earnings enhancing for UK COAL.

Gordon McPhie, chief executive, UK COAL said: "I am pleased with the successful sale of Gloucester Coal. The disposal of the business will allow the Group to focus on its core UK businesses. The proceeds will be used for general purposes and to fund investments for the future, including investment on new coal face equipment at all our long-term collieries."

GCL, which is listed on the Australian stock exchange, achieved sales of 1.9 million tonnes in the year to 31 December 2003 with losses attributable to the Group of £4.2 million. The book value of the tangible net assets of the business was £10.3 million, as at 31 December 2003.