Big increase in UK Coal’s debt mountain reinforces the need for a Banker’s Guarantee for proposed Minorca Opencast development.
The latest preliminary set of results from UK Coal plc released today show a significant increase in the level of debt that the Company owes when comparing the results from 2009 with 2010. Then, the Company lost £127m and at the end of 2009 the total level of debt stood at £181.9m. In the last year the Company racked up another loss of £125m and the total level of debt increased to £242m
Two areas of activity contributed to the losses. The Deep Mines continue to be a drain on the Group’s financial resources, recording another loss of £41.6m, whilst the property arm Harworth Estates activities resulted in a decline of property values which contributed another £33.1m, an increase in losses on property compared with last year (£24.5m). The only area to make any profit seems to be Opencast Mining where a profit of £400,000 is stated, but this is less than the £1.9m recorded for 2009.
The Minorca Opencast Protest Group (MOPG), in lodging its objections to UK Coal’s Minorca Application has already alerted Leicestershire County Council (LCC) to UK Coal’s weak financial position. They, in conjunction with Measham Parish Council had already asked that if LCC were to grant planning permission, then a separate condition for a Bankers Guarantee to cover the cost of a proposed £150,00 Community Fund and the estimated cost of up to £2.5m to restore a section of the Ashby Canal be included in the set of conditions attached to the granting of planning permission.
Now the Company, in publishing these preliminary results, has revealed that its financial position is going from bad to worse, thus reinforcing the advice already given to LCC by MOPG and Measham Parish Council to attach the Bankers Guarantee condition to the set of conditions that LCC would apply to the approval of permission to mine at Minorca.
UK Coal plc submitted a planning application for an opencast mine on the Minorca site between Measham and Swepstone in July 2009. No date has yet been set by LCC to determine the planning application.
The Minorca Opencast Protest Group was formed in 2008, specifically to oppose this planning application.
Terry Morrell, MOPG Chairperson and Press Officer said
“It is now more important than ever that people wake up to the risks associated with UK Coal gaining planning permission to mine Minorca’s coal. These latest results from UK Coal plc show that the Company’s financial health is going from bad to worse. Its level debt in one year has shot up from nearly £182m in 2009 to £242m in 2010, an increase of 33%. This level of debt would have been much greater if the Company had not sold part of its landholdings and realised £24m to pay down its debt levels.
However you can only sell land once. Without these sales the annual loss would have been nearer to £148m than £125m. The Company’s three remaining deep coal mines keep running at a loss and now the company is losing money on its property arm on an annual basis.
The Minorca Opencast Protest Group therefore reiterates that without the Banker’s Guarantee being attached by Leicestershire County Council to the planning conditions, if the Council are so minded to grant planning permission , that the risk the local communities face of not having a Community Fund or the Ashby Canal restored have increased rather than lesson since MOPG first raised this issue.
It would be far better for all concerned if Leicester County Council refused to grant planning permission.”
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All figures used in this press release are based on data from UK Coal PLC’s own web site:
UK Coal PLC Final Results (2010)
UK Coal plc Annual Financial Report (2010)
Published 19/4/11 @
FOR MORE INFORMATION ON THIS PRESS RELEASE CONTACT:
TERRY MORRELL, CHAIRPERSON, THE MINORCA OPENCAST PROTEST GROUP
tel 01530 810319 or 07988697554
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