Notes the Sale of Hatfield Colliery
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For immediate release |
10 December 2013 |
HARGREAVES SERVICES PLC
("Hargreaves" or the "Group")
Notes the Sale of Hatfield Colliery
Hargreaves Services plc (AIM: HSP), the UK's leading supplier of solid fuels and bulk material logistics, notes the sale of the business and assets of Hatfield Colliery Limited to Hatfield Colliery Partnership Limited ("HCPL"), a company ultimately owned and controlled by an Employee Benefit Trust. This transaction sees the ultimate equity ownership of the mine transfer from ING Bank to a Trust run for the benefit of the employees.
Hargreaves has assisted in the restructure by, among other things, entering into a new contract with HCPL on substantially the same terms as the existing off-take contract, which had approximately one year left to run. Hargreaves has also entered into a further off-take contract that extends into the second half of 2015.
Although Hargreaves will continue to provide whatever support and assistance it can to HCPL, the mine management contract has been terminated by Hargreaves and no such contract will be put in place with HCPL. Any future services, equipment or consumables provided by Hargreaves will be carried out on an arm's length commercial basis. Hargreaves has already taken steps to reduce its cost base or re-deploy resources accordingly. The impact of terminating the management contract on the current and future financial years is not likely to be material.
Hargreaves has also granted a short term option to HCPL to acquire an extra set of face equipment from Maltby Colliery Limited ("MCL"). All remaining assets and trading balances are carried at book values that do not exceed their net realisable value and therefore Hargreaves does not expect to write off any balances following the restructure.
Gordon Banham, CEO of Hargreaves, commented: "It has been a very challenging period for Hatfield with the combination of the landslip and recent geological problems. Hatfield remains a major employer in the Doncaster area with over 400 direct employees. Significant efforts and progress have been made by all the stakeholders and employees at Hatfield to improve the efficiency of the operation. I would also like to acknowledge and applaud the role that ING Bank have played during the past two years. ING have remained supportive and their professionalism has been key in enabling this highly complex restructure to take place. Hargreaves understands the challenges of operating a deep mine and, whilst focussing on our successful surface mining assets, we will continue to assist the operation in any way we can."
For further details:
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Hargreaves Services |
0191 373 4485 |
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Gordon Banham, Group Chief Executive |
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Iain Cockburn, Group Finance Director |
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Buchanan |
020 7466 5000 |
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Mark Court / Fiona Henson / Sophie Cowles |
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N+1 Singer (Nomad & Joint Broker) |
020 7496 3000 |
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Sandy Fraser / Nick Owen |
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Jefferies International Limited (Joint Broker) |
020 7029 8000 |
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Sara Hale / Harry Nicholas |
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END
This information is provided by RNS
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