UK Coal will raise 100m to pay debt

LOSS-MAKING miner UK Coal&rsquo;s &pound;100m share placing will be priced at a 37.6 per cent discount to Tuesday night&rsquo;s closing price of 120.25p.<br /><br />The issue of 142m shares is priced at 75p a share, and will see the company&rsquo;s market value almost double.<br /><br />UK Coal&rsquo;s biggest shareholder, Peel Holdings &ndash; which owns 28.28 per cent and is controlled by entrepreneur John Whittaker &ndash; is backing the fundraising. <br /><br />Evolution and Numis are underwriting the remainder of the shares for UK Coal, whose market cap is &pound;189m, while Gleacher Shacklock advised on the deal.<br /><br />The move to bolster its finances comes ahead of a plan to prolong the life of two of its deep mines. As well as funding a major investment programme, UK Coal wants to slash its debt pile.<br /><br />Net debt at the group hit &pound;190m at the end of June, <br /><br />UK Coal is aiming to extend the working life of its deep mines at Kellingley and Thoresby in Yorkshire and Nottinghamshire until 2019 and 2017 respectively. It is also seeking to develop its Daw Mill colliery in Warwickshire.<br /><br />The group said current banking facilities gave insufficient headroom for its needs for 2010.<br /><br />UK Coal, which produces around 8m tonnes of coal each year, supplies 95 per cent of the coal it produces to four core electricity customers: Drax, EDF, Scottish &amp; Southern and E.ON.<br /><br />Long-term contracts which require the company to sell coal at low, fixed prices have put its finances under pressure. It has been hit further as production costs rise above inflation, and after output problems hit it at certain mines.<br /><br /><strong>CHRIS WILKINSON NUMIS</strong><br />UK Coal&rsquo;s &pound;100m cash call was underwritten by Numis Securities and Evolution, whose adviser teams were led by Chris Wilkinson (pictured) and Brent Nabbs, and Simon Edwards and Chris Sim respectively. UK Coal was advised by Gleacher Shacklock&rsquo;s Edward Cumming-Bruce and by James Dawson.<br /><br /> Wilkinson has also worked on deals with the online betting website 32Red and car dealer Lookers. His colleague at Numis &ndash; which is also the joint bookrunner and broker for the share issue &ndash; Brent Nabbs, recently advised on the fundraising at Alliance Pharma.<br /><br /> &ldquo;This is a good deal for the market and for the company,&rdquo; Edwards said yesterday. &ldquo;It&rsquo;s not a million miles from a one-to-one issue,&rdquo; he added.<br /> Edwards and Sim also worked together on the London-listed Mano River Resources account.<br /><br /> City bigwig and fishing fan Edward Cumming-Bruce advised on the deal on behalf of Gleacher. He was joined by James Dawson.<br /><br /> Cumming-Bruce was hired from Dresdner Kleinwort Wasserstein by chief executive Tim Shacklock.<br /><br /> He had held positions such as co-head of global telecoms investment banking, co-head of UK investment banking and global head of equity capital markets.<br /><br /> He studied at Oxford, as did his colleague Dawson, who has an MA in Classics from the university&rsquo;s Oriel College.