Coal news and updates

TECO Energy pulls offer to sell coal assets to Cambrian Coal off table

TECO Energy has terminated its long-standing offer to sell its coal assets to Cambrian Coal, though an agreement between the companies is still possible, a spokeswoman confirmed.

In a Monday filing with the US Securities and Exchange Commission, TECO Energy said it had terminated a securities purchase agreement for the sale of TECO Coal to Cambrian that was first agreed upon in October 2014 and then amended to reduce the price to $120 million.

TECO Energy notified Booth Energy subsidiary Cambrian it was terminating the deal Friday, but a new deal with Cambrian is not out of the question, TECO Energy spokeswoman Sylvia Vega said.

In the filing, TECO Energy said it "remains committed to exiting the coal business, and is continuing to have discussions with interested parties, including [Cambrian Coal], in order to complete the exit of this business."

TECO Coal's facilities in Virginia and Kentucky are run by its Premier Elkhorn Coal, Perry County Coal and Clintwood Elkhorn Mining subsidiaries.

The deal for the assets with Cambrian fell though in June after a final deadline passed after four extensions. TECO Energy then announced it had entered into a non-binding letter of intent with a new, unnamed buyer, but no details of the potential deal were announced.

The deadline for the second deal in July passed without the sides finalizing the sale, and TECO Energy then announced it would continue negotiations with the unnamed buyer, Cambrian and other potential buyers.

At that time, TECO Energy noted that its securities purchase agreement with Cambrian had not been terminated by either company.

TECO COAL TOOK $50.8 MIL Q2 IMPAIRMENT CHARGE

In its second-quarter earnings report, TECO Energy reported that its coal assets, listed as discontinued operations, lost $49.7 million in Q2, mostly due to impairment charges of $50.8 million associated with the pending sale of TECO Coal.

In the earnings report, TECO Energy said it "continues to be in active discussions with interested parties in an effort to complete the sale" and the impairment charge was "based on management's assessment of current market conditions and the discussions with interested parties."

In addressing the sale of the coal assets during TECO Energy's Q2 earnings call July 30, CEO John Ramil said, "we've talked about having discussions with parties on the sale of coal, and they are happening real-time."

Asked if TECO Coal could be sold soon, Ramil said: "I think everybody knows where the [coal] market is and what we've been doing, and there's no more to it than that."

source: http://www.platts.com