TECO Energy Closes the Sale of Its TECO Coal Subsidiary
September 21 2015 - 4:15PM
Business Wire
TECO Energy Inc. (NYSE:TE) today announced that it has closed
the sale of its coal mining subsidiary, TECO Coal LLC, to Cambrian
Coal Corporation, a Booth Energy company. The sales agreement did
not provide for an up-front purchase payment, but does include
future contingent consideration of $60 million if certain coal
benchmark prices reach certain levels over the next five years.
TECO Energy retains certain personnel related liabilities, but all
other TECO Coal liabilities were transferred in the transaction.
The retained liabilities included pension liability, which was
fully funded at June 30, 2015, and severance agreements, which were
accrued at June 30, 2015.
TECO Energy Chief Executive Officer John Ramil said, “The
closing of this sale results in a complete exit from the coal
mining business. 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.”
Ramil went on to say, “This transaction completes the process of
returning TECO Energy to a mix of regulated electric and gas
utility businesses. I would like to thank all those who have
contributed over the years to positioning our company to completely
focus on growing our strong utility operations.”
In the third quarter of 2014 TECO Coal was classified as an
asset held for sale, and its operating results have been reported
as discontinued operations since that time. In addition, through
June 30, 2015, TECO Energy has recorded non-cash valuation
adjustments of approximately $128 million, after tax, to the
carrying value of TECO Coal, and expects that any final closing
adjustments will not be material. In the third quarter of 2015,
TECO Coal will record a previously disclosed charge in discontinued
operations of approximately $8 million, after-tax, related to black
lung liabilities.
J.P. Morgan Securities LLC acted as TECO Energy’s financial
advisor, and Skadden, Arps, Slate, Meagher & Flom, LLP acted as
its legal advisor.
TECO Energy Inc. (NYSE: TE) is an energy-related 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
510,000 customers across New Mexico.
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version on businesswire.com: http://www.businesswire.com/news/home/20150921006361/en/
TECO Energy Inc.News MediaCherie Jacobs,
813-228-4945orInvestor RelationsNadia Yazback,
813-228-1701www.tecoenergy.com
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