The company stated it was not aware of any proposal from its major shareholder or any other source.
“The group is at a very early stage of investigating an approach it has received which could address the group's exposure to the volatile performance of its deep mines through a merger transaction,” the company said.
It emphasised that the proposal was highly conditional and at a very preliminary stage, and no view could be expressed as to whether a transaction would result.
UK Coal has encountered continuing difficulties in the performance of its deep mines in recent months, which is having a material impact on its financial position.
At Daw Mill, preparation for production at the new face was hindered by difficult geological conditions and, as a result, the start of production on the new face is now expected in April rather than at the end of March.
“The exposure of the group to the volatile performance in its deep mines is a significant concern to the directors and mitigating the effects of this exposure, by operating improvements or structural means, is a priority,” the company said.
Daw Mill went through a rough patch at the end of 2009 with reduced dispatches due to a higher than usual proportion of dirt in the panel. The mine produced 2.9 million tonnes for the year, down from 3.2Mt in 2008.
UK Coal produced 7Mt overall in 2009, 5.65Mt from its deep mines.
Deep mining operations had a difficult December quarter, producing 1.2Mt compared to 1.8Mt last year.
Despite the production decreases, 2009 was a good year for development crews with deep mines increasing development metreage by 38%. Overall driveage for the year was 19.8km.
Revenue for 2009 was £317 million, with the full-year loss before tax and exceptional items at £115 million and an operating loss of £65 million.
