News Archive

03 November 2009

Refinancing of bank debt

ATH Resources plc ("the Group" or "ATH"), one of the UK's largest coal producers, is pleased to announce the completion of the refinancing of the Group's banking arrangements.

The Group has agreed a new £30 million revolving credit facility ("RCF") in a club deal with HSBC and Yorkshire Bank. The RCF comes into effect immediately and extends for a three year period ending in November 2012. Maximum permitted borrowings under the RCF are £30 million during the first year of the new arrangements, £27.5 million during the second year and £22.5 million during the final year. 

The new arrangements secure attractive, long term funding for the Group and provide a more appropriate capital structure and the financial resources to continue developing surface mining and coal recovery projects within the UK. The RCF replaces the Group's existing term debt arrangements, which were due to expire in February 2011, and working capital facilities. The combined outstanding balances under the previous arrangements totalled £20 million at 4 October 2009, the Group's most recent financial year-end.

Commenting on the new banking arrangements, Tom Allchurch, Chief Executive of ATH Resources, said "I am delighted that we have been able to secure attractive, long term debt funding for the Group. The new facility provides ATH Resources with greater flexibility and the capacity to fund future projects. We are very pleased to be working with HSBC and Yorkshire Bank, both of whom know ATH Resources well and have been very supportive in developing these new financing arrangements. I look forward to nurturing a strong partnership with both banks through the next period of ATH Resources' development."

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Notes to Editors

ATH Resources is an AIM-listed operator of surface coal mines in the UK with five operational mines in Scotland; Skares Road, Grievehill and Laigh Glenmuir in East Ayrshire, Glenmuckloch in Dumfries and Galloway and Muir Dean in Fife. The Company is currently the third largest producer of coal in the UK, producing approximately 2 million tonnes per annum. Coal is used to generate around a third of the UK's electricity and the Company now holds coal supply contracts with four of the UK's main electricity generating companies.

The management team has been in place since 1998. It acquired the rights to operate (and subsequently acquire) the Skares Road mine with support from The Alchemy Plan. Following ATH Resources' incorporation in October 2003, and backed by a follow on investment from The Alchemy Plan, the Company acquired the Garleffan mine in November 2003. Garleffan is currently being restored having finished coaling in June 2006. ATH Resources listed on the AIM market of the London Stock Exchange in June 2004.

In June 2005, having raised £18 million by way of an Open Offer, the Group acquired two new opencast sites, Grievehill and Glenmuckloch in Scotland. The acquisition increased the Group's reserve base by 160%.

In May 2006, the Group acquired ATH Regeneration, a successful coal recovery, land remediation and regeneration business with a particular focus on colliery spoil heap reclamation projects. The acquisition, which was earnings enhancing, allowed ATH to build on its skills as a regenerator of land, whilst developing strong relationships with key English planning authorities. The Company has been successfully integrated into the Group. The operational diversification that the acquisition brings to the Group will be a significant driver of ATH's organic growth going forward both in the UK and overseas and the business is actively pursuing a number of projects in Australia.

For the year ending 28 September 2008, the Group achieved turnover of £76.9 million, an increase of 9% on its 2007 year end, whilst operating profit increased by 7% to £11.9m for the same period.

Further information on ATH Resources can be found at www.ath.co.uk.