...shareholding in Harworth Estates Property Group Ltd for £150 million
Leading business and financial adviser Grant Thornton UK LLP has advised the board of the Pension Protection Fund (the PPF) alongside international law firm Berwin Leighton Paisner (BLP) on the disposal of its 75.1 per cent shareholding in Harworth Estates Property Group Ltd (Harworth Estates) to Coalfield Resources Plc (formerly UK Coal plc) for total consideration of £150 million.
The consideration was satisfied by a cash payment of approximately £97 million and the issuance of new shares in Coalfield Resources to the PPF, which were admitted to trading on the LSE’s main market for listed securities this morning (24 March 2015). A firm placing and open offer raised gross proceeds of approximately £115 million which will be used to satisfy the cash payment due to the PPF, to provide additional working capital of approximately £13.6 million and financial flexibility to fund the growth strategy of the company.
Harworth Estates is one of the largest property and regeneration businesses across the East Midlands, Yorkshire and the North of England, owning and/or managing a diversified portfolio of approximately 27,000 acres across some 200 sites valued at approximately £298.5 million.
The PPF was established to pay compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover the PPF levels of compensation. If the scheme cannot afford to purchase such benefits for its members, the assets of the scheme transfer into the PPF and the board of the PPF takes over responsibility for paying compensation to members.
Coalfield Resources (CfR) was, until a restructuring in December 2012, the parent company of the UK’s largest coal miner, UK Coal plc. In July 2013, following a fire at the largest mine owned by CfR, the statutory employer of the two pensions schemes entered administration, which was followed by a controlled entry of these two pension schemes into the PPF. This saw the PPF take control of the liabilities of the two pension schemes as well as taking control of the assets of the schemes, including its shares in Harworth Estates.
Commenting on the transaction Stephen Baker from Grant Thornton UK LLP said: “We are delighted to have advised the PPF in relation to this transaction, which provides an effective solution for Harworth Estates while meeting the short and medium term objectives of the PPF.
Marc Trottier, Partner, Restructuring & Insolvency, BLP, commented: “We advised the PPF on this transaction which provides a stabilised platform for CfR to grow with the PPF and as a result of becoming a 25 per cent investor in the business, PPF will therefore benefit from such growth. This transaction demonstrates the technical expertise of our restructuring lawyers here at BLP which, combined with the specialist knowledge of the mining industry of Alexander Keepin, our Co-Head of Mining and Partner, alongside his practice, provided a specialist cross-discipline team to assist the PPF on this transaction.”
The Grant Thornton UK LLP team was led by Stephen Baker and Salmaan Khawaja, with assistance from Nicola Gray and Jamie Barklem. The BLP team was led by Marc Trottier and Alexander Keepin with assistance from Simon J Clarke (Associate, Restructuring & Insolvency) and Jamie Kerr (Associate, Corporate Finance).