Tampa, Florida-based TECO Energy Inc. has entered into a fourth amendment of its agreement to sell subsidiary TECO Coal to Cambrian Coal Corp., a member of the Booth Energy group.
The amendment is a modification of the terms of the Securities Purchase Agreement (SPA) originally dated October 17, 2014, related to the sale of TECO Coal, which operates in Letcher, Pike and Perry counties, to Cambrian Coal.
This fourth amendment extends the closing date to June 5. The total sales price remains $140 million including future contingent consideration of $60 million if certain coal benchmark prices reach certain levels over the next five years. The $80 million cash base purchase price is subject to post-closing adjustments.
“We remain committed to exiting the coal business in the most effective way,” TECO Energy CEO John Ramil said. “We continue to believe that working cooperatively with Cambrian and providing it with additional time to work with its lending group to obtain financing for the transaction is the preferred way to meet that commitment. We are well positioned to exit the busi- ness in many ways.
“The business is in discontinued operations, we have written it down appropriately to reflect the transaction value, and we have right-sized the operations for the current market conditions.
“We will report first quarter results on April 28, and we look forward to reporting on our utility businesses, with the expected good growth in our Florida operations and positive earnings contribution from New Mexico Gas.”
In addition to coal-production facilities in Letcher, Pike and Perry counties, TECO Coal owns and operates coal-production facilities in Tennessee and Virginia. TECO Coal also owns Pike-Letcher Land Partners and the Raven Golf Course and subdivision at Jenkins.
TECO Energy operates regulated electric and gas utilities in Florida and New Mexico, including Tampa Electric and Peoples Gas System in Florida, and New Mexico Gas Co.