The UK’s biggest coal producer would issue 142 million shares in a firm placing and open offer priced at 75 pence a share, a 37.6% discount to the 120.25 pence closing price of the company’s shares on September 15.
A total of 55,556,403 new shares are proposed to be issued through the firm placing and 86,489,010 new shares are proposed to be issued through the placing and open offer.
In addition, the company has also proposed amendments to the terms of the group’s banking facilities, conditional upon the capital raising.
Peel Holdings, the company’s largest shareholder, which owns 28.28% of the shares through its subsidiary Goodweather, said that it is fully supportive of the capital raising and committed to participate in the firm placing and take up its open offer entitlement to ensure that its percentage shareholding is not diluted by the capital raising.
The capital raising is subject to approval of the company’s shareholders at a general meeting expected to be held on October 9, 2009.
The company, which runs mines in Kellingley and Thoresby in Yorkshire, and Welbeck in Nottinghamshire, has struggled in the past year from falling coal prices and the poor performance of its property assets.
David Jones, chairman of UK Coal, said: “In the recent past, UK Coal has been constrained by the pricing from legacy contracts and production difficulties in certain of its deep mines. Management has taken actions to address these issues, in particular investments to produce a modern, efficient mining business with substantial and economically accessible reserves.”
