UK Coal Surface Mines Ltd has been bought by UK CSMR in a pre-pack administration deal, saving 279 jobs.
Based in Northumberland with surface mines in Butterwell, Potland Burn and Park Wall North, the company has been suffering from falling coal prices (a problem in the industry as a whole) as well as declining forecast profits due to failed planning applications.
David Kelly, Rob Hunt and Matthew Callaghan of PwC were appointed joint administrators on the 14th November and secured a sale of the company to UK CSMR immediately upon appointment, safeguarding 279 jobs.
David Kelly said “The company was part of the UK Coal group which has been impacted by the decline in world coal prices”.
“The sale has preserved the business to allow the continued operation and restoration of the company’s active surface mine sites and all the company’s 279 employees transferred to the purchaser.”
A pre-pack is often seen as controversial because the company can be sold to a third party or a new company (made up of existing directors), however it is usually a far better option than say liquidation where the business would cease trading and all jobs would be lost.
By securing a pre-pack deal, this coal business will be able to continue and all employees will keep their jobs. It is a great outcome for staff, shareholders and creditors as it can continue to trade and the business has a chance to improve.