The UK’s largest coal mining company, UK Coal Operations, is reportedly set for a state-backed pre-pack administration that would save 2,000 jobs.
As reported by The Sunday Times, PricewaterhouseCoopers is expected to oversee the process within the next fortnight.
The Pension Protection Fund (PPF) is expected to buy the workable assets from administrators in return for shouldering UK Coal Operations’ £543 million pension liability.
UK Coal Operations sought a voluntary liquidation in May 2013, following a fire at the Daw Mill colliery in February 2013, one of the three deep mines it operated, which resulted in the loss of 650 jobs.
The company had previously returned to profit in 2011 following four years of losses.
Two deep mines, at Kellingley in Yorkshire and Thoresby in Nottinghamshire, as well as six surface mines and the company’s 75% stake in a property firm, Harworth Estates, will be handed over to the PPF.
The PPF, a lifeboat scheme for distressed pension funds, is also reportedly due to take over UK Coal Operations’ pension scheme.
The Daw Mill colliery is expected to be handed to the Coal Authority.
Whilst members of the UK Coal pension schemes are expected to see a reduction in benefits as a result of a rescue by the PPF, the deal is also being designed as a way to safeguard jobs.
UK Coal Operations was unavailable for comment.