Sale of ATH Regeneration
July 30 2010 - 2:00AM
UK Regulatory
TIDMATH
RNS Number : 2034Q
ATH Resources plc
30 July 2010
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| Press Release | 30 July 2010 |
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ATH Resources plc
("ATH Resources" or the "Group")
Sale of ATH Regeneration
ATH Resources plc ("ATH"), one of the UK's largest coal producers, today
announces that it has completed the sale of the assets of ATH Regeneration
Limited ("Regen"), the part of ATH Resources which specialises in coal recovery,
land remediation and regeneration, to a newly formed company, RecyCoal Limited
("RecyCoal"). RecyCoal is funded by a substantial investment fund and its
partners, and will have amongst its shareholders Tom Allchurch, the Group's
current Chief Executive, and Steven Beaumont, the current Group Finance
Director. The shareholders of RecyCoal have committed GBP40 million to the
acquisition and development of RecyCoal.
The proceeds from the disposal could total some GBP17 million over a seven year
period, comprising GBP6.5 million in cash on completion plus royalties, capped
at GBP8 million, paid dependent upon the future performance of RecyCoal. In
addition, a further GBP2.5 million is expected from the sale of retained land
and buildings adjacent to the Langton site once the Langton regeneration project
is completed in 2013.
ATH Resources has also been given an option to reduce the risk of it not
receiving future royalties by electing to receive a payment of GBP2 million in
January 2011. If this option is taken, the total royalty cap will be reduced
from GBP8 million to GBP5 million.
In the Group's most recent audited accounts for the year to 4 October 2009, the
ATH Regeneration business had no turnover and made an operating loss before
taxation of GBP2.4 million. There will be a loss on disposal of around GBP0.8
million after tax (including the costs of the transaction) and additionally
goodwill will be written down by a further GBP2.3 million.
With both the Chief Executive and Group Finance Director leaving the business,
the Board is keen to ensure that continuity and stability are maintained. As a
result, David Port the current Non-Executive Chairman has been appointed
Executive Chairman. Alistair Black who has been with the Group since 1998 and
is also the Managing Director of the mining business becomes the new Chief
Executive. Steven Beaumont, the current Group Finance Director, will continue
in that role to facilitate a smooth handover until later in the year when his
replacement has been appointed. Tom Allchurch will stay on the Board as a
Non-Executive Director for a transitional period.
The Group entered into a new revolving credit facility ("RCF") of GBP30 million
with HSBC and Yorkshire Bank in November 2009 which was contracted to reduce to
GBP27.5 million in November 2010 and GBP22.5 million in November 2011. The
Board will use the proceeds from the disposal to reduce the drawings under the
facility with the current maximum facility reducing to GBP23.5 million. Further
receipts will be used for working capital purposes and the RCF will not reduce
further until November 2011 when it will become GBP18.5 million.
David Port, Executive Chairman of ATH Resources commented: "The disposal of the
ATH Regeneration assets will reduce debt and allow the Group to focus on its
surface mining business without having to raise the significant amounts of
capital necessary to fully exploit the regeneration business. The disposal will
also remove the inconsistent nature of the earnings of this activity and the
cost and risk associated with the development of a new business in Australia
some 11,000 miles away, whilst preserving the right to an income stream should
the business prove successful. The Board therefore believes that disposal is in
the best interests of ATH Resources and its shareholders."
Tom Allchurch and Steven Beaumont are related parties for the purposes of Rule
13 of the AIM Rules for Companies. As such, the directors, with the exception
of Tom Allchurch and Steven Beaumont (the "Independent Directors"), have a duty
to consider whether the transaction is fair and reasonable so far as
shareholders are concerned. In the course of its deliberations, the Independent
Directors sought independent valuation advice from Baker Tilly. The Independent
Directors, having consulted with the Group's nominated adviser Seymour Pierce,
consider that the proposed transaction is fair and reasonable insofar as the
Group's shareholders are concerned.
- Ends -
For further information:
+------------------------------------+--------------------------+
| ATH Resources plc | |
+------------------------------------+--------------------------+
| David Port, Executive Chairman | Tel: +44 (0) 7836 693798 |
+------------------------------------+--------------------------+
+------------------------------------+--------------------------+
| Seymour Pierce Limited | |
+------------------------------------+--------------------------+
| John Cowie | Tel: +44 (0) 207 107 |
| | 8000 |
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Media enquiries:
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| Abchurch | |
+------------------------------------+--------------------------+
| Sarah Hollins / Mark Dixon | Tel: +44 (0) 20 7398 |
| | 7729 |
+------------------------------------+--------------------------+
| mark.dixon@abchurch-group.com | www.abchurch-group.com |
+------------------------------------+--------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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