UK Coal plans a fundraising

UK COAL, the biggest coal producer in the UK, is set to ask its shareholders to help raise around &pound;100m to shore up its balance sheet.<br /><br />The announcement, due this morning, comes as the company seeks to address its pension deficit and a drop in the value of its land.<br /><br />UK Coal owns roughly 4,000 acres, which it hopes to use for development. It is valued at around &pound;380m, but the company expects that its value could rise as high as &pound;900m when the property market recovers.<br /><br />Earlier this year, the company posted pre-tax losses of &pound;81.5m for the first half, widening from losses of &pound;9.9m the year before.<br /><br />UK Coal, which produces around 8m tonnes of coal each year, provides 95 per cent of the coal it produces to four core electricity customers: Drax, EDF, Scottish &amp; Southern and E.ON.<br /><br />The rights issue is expected to be run by Evolution Securities and Numis Securities.<br /><br />UK Coal declined to comment last night, saying it would not talk about market speculation or rumour.<br /><br />The group, which produces about half of the UK&rsquo;s coal, has a market cap of &pound;189m.<br />