With coal markets continuing to weaken, TECO Energy Inc. has cut its asking price for TECO Coal Company from $170 million to $140 million.
The $30 million price decrease was made public last week when TECO Energy announced it has entered into a second amendment of its October 2014 agreement with Cambrian Coal Corporation, a member of the Booth Energy group, to modify the terms of the Securities Purchase Agreement related to the sale of TECO Coal.
Under the second amendment announced by TECO Energy, Cambrian Coal would pay $80 million of the $140 million in cash at the closing of the sale, with the remaining $60 million payment required only if certain coal benchmark prices reached certain levels over the next five years. The $80 million cash base purchase price is subject to post-closing adjustments, the press release said. The Securities Purchas- ing Agreement remains subject to the buyer obtaining financing and can be terminated by either party if the specified closing conditions are not met by March 13, 2015.
TECO Energy CEO John Ramil stated, “ The coal markets have continued to weaken for a number of months now. We believe that the new amended agreement reflects the fair value of TECO Coal in the current markets, and allows us to execute our strategy to exit the coal business in an expeditious manner.”
TECO Energy’s fourth quarter and full-year 2014 results will reflect an additional non-cash, aftertax impairment charge of approximately $ 11.0 million in discontinued operations.
Locally, TECO Coal operates Premier Coal, Perry County Coal, and Pike-Letcher Coal Partners. The company owns property in Letcher County including Raven Rock atop Pine Mountain near the Kentucky-Virginia line and the nearby Raven Rock Golf Course and housing development.
Parent company TECO Energy Inc. is an energyrelated holding company with regulated electric and gas utilities in Florida and New Mexico. Tampa Electric serves more than 700,000 customers in West Central Florida; Peoples Gas System serves more than 350,000 customers across Florida; and New Mexico Gas Co. serves more than 513,000 customers across New Mexico.
TECO Coal also owns and operates coal-production facilities in Tennessee and Virginia.