Dive Brief:
- TECO Energy said it has closed on the sale of its coal mining business to Cambrian Coal Corp., a subsidiary of Booth Energy, the Tampa Bay Times reports.
- While the deal did not include an up-front payment, if coal prices rise over the next five years TECO could be owed up to $60 million.
- The deal completes TECO's exit from the coal industry, which had been a part of the company's business since the mid-70s.
Dive Insight:
TECO Energy is the latest company exiting the coal industry, closing the sale with no up-front payment on its mining subsidiary, TECO Coal LLC, this week.
“The closing of this sale results in a complete exit from the coal mining business,"TECO Energy CEO John Ramil said in a statement. "TECO Coal was an important component of TECO Energy’s business mix since the mid-1970s, contributing strong earnings and cash flow for many years. We appreciate the dedicated team members at TECO Coal and the contributions they have made to TECO Energy’s success.”
But if coal prices rise in the next five years, TECO Energy may wind up getting $60 million for the deal.
TECO sold the unit to a Booth Energy subsidiary, and took no up-front payment in return. While TECO retains certain personnel related liabilities, all other TECO Coal liabilities were transferred in the deal.
J.P. Morgan Securities LLC advised TECO on the financial side of the deal; Skadden, Arps, Slate, Meagher & Flom, LLP acted as its legal advisor.
TECO Coal was classified as an asset held for sale in 2014, and since then, its operating results were reported as discontinued operations. In the third quarter of this year, TECO Coal will record a previously disclosed charge in discontinued operations of approximately $8 million, after-tax, related to black lung liabilities.
