Hargreaves purchase ATH Resources’ debt
Durham-based solid-fuel distributor acquires secured debt of troubled coal-mining firm
HARGREAVES Surface Mining Ltd, a subsidiary of solid fuel distributors Hargreaves Services plc, have purchased secured debt owed by Aardvark TMC Ltd (principal operating subsidiary of the ATH Group) and certain other companies within the ATH Group.
ATH Resources, who employ around 200 staff in Ayrshire, Fife and Dumfries and Galloway, have been in administration since early December 2012.
The debt, which has a face value of £12.5 million and is secured over the assets of Aardvark, has been purchased from private equity firm Becap Capital Coal Ltd for a cash sum of £5.0 million.
According to Hargreaves, the transaction was undertaken following extensive discussions with many of ATH’s key stakeholders, including management, landowners, local authorities and the Scottish Government.
The Durham-based company says its intention is to lead a project to restructure the Aardvark business in conjunction with management and the major stakeholders.
The objectives of the restructuring are twofold: first, to create an investment platform that allows viable sites to continue to operate and to safeguard employment; and secondly, to create a new structure and process, independent of ongoing operations, to help to address outstanding historic restoration obligations.
Hargreaves say any profit made on the acquisition of the debt will be made available to support the historic restoration.
Commenting on the transaction, Gordon Banham, chief executive officer of Hargreaves, (pictured) said: ‘We have been actively seeking our own opportunities to invest in surface mining in Scotland and so we welcome the opportunity to participate in this project.
‘Our intention is that our assistance will help to safeguard jobs and establish our credentials as a key participant in the Scottish mining industry.’
Fergus Ewing, Scottish Minister for Energy, Enterprise & Tourism, said he was pleased that Hargreaves has stepped forward to lead this initiative.
‘Any opportunity to preserve jobs during difficult economic times is very positive,’ he commented. ‘We are also pleased with any initiative that brings additional focus and funding to deal with legacy restoration liabilities.’
