Moulton Mulls Bid To Rescue Ailing UK Coal
The veteran investor Jon Moulton is mulling a multimillion pound investment aimed at rescuing Britain's biggest remaining coal miner from collapse.
Sky News has learnt that Mr Moulton's listed private equity group, Better Capital, is at the early stages of considering ways of structuring a deal with UK Coal, which stands on the brink of insolvency.
UK Coal this week began redundancy consultations with staff at its collieries in Thoresby, Nottinghamshire and Kellingley in Yorkshire, which collectively employ 1,300 of the company's 2,000 staff.
Kellingley has decades worth of coal remaining to mine.
The company has said in recent days that it needs £10m "within weeks" to survive, and Prime Minister David Cameron said on Thursday the Government was prepared to consider providing some financial support.
"We are not looking at a long-term future here, but in order to close the mines slowly we need to have money," a UK Coal spokesman said earlier this week.
"If we secure funding it gives us time to work with suppliers and employees to ensure a smooth closure programme. Thoresby and Kellingley would have at least 18 months, rather than an immediate closure if we don't get the funding."
Mr Moulton indicated his interest in examining a deal to Sky News but declined to comment further. It is not clear whether there has been formal contact between Better Capital and UK Coal.
It is not the first time Mr Moulton has looked at the business. In 2005, Alchemy, the private equity group he headed at the time, made an approach to acquire UK Coal, which was listed on the stock market, but the talks collapsed.
Insiders believe the sums now required to deliver a viable future for the business could be in the region of £50m, much higher than that indicated by the company.
Hargreaves Services, the UK's only other significant coal producer, has said it is in talks about providing assistance but is not interested in buying its peer.
UK Coal has undergone a series of restructurings in recent years, with Coalfield Resources, formerly its parent company, now the only stock market-listed relic of its past.
Last year, UK Coal was taken over by the Pension Protection Fund, which safeguards the retirement savings of employees whose companies collapse.
However, it has continued to suffer from the strength of the pound and cheap coal imports.
UK Coal's other mine, Hatfield Colliery in South Yorkshire, would become Britain's last remaining open-pit mine if its sister assets do close.
Last year 280 staff lost their jobs when the company's largest coal mine at Daw Mill shut down after being hit by a devastating fire.