TECO Energy (NYSE: TE) announced April 20 that on April 17 it entered into a fourth amendment of its agreement with Cambrian Coal Corp., a member of the Booth Energy group, to modify the terms of the October 2014 Securities Purchase Agreement (SPA) related to the sale of Central Appalachia producer TECO 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.
TECO Energy CEO John Ramil stated, “We remain committed to exiting the coal business in the most effective way. 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 business 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.”
TECO Energy is an energy-related holding company with regulated electric and gas utilities in Florida and New Mexico. TECO Coal owns and operates coal-production facilities in Kentucky, Tennessee and Virginia, with most operations concentrated in eastern Kentucky. It produces a specialty coal that TECO Energy’s Tampa Electric subsidiary hasn’t needed for years. Booth Energy is controlled by Jim Booth, a veteran operator in Central Appalachia, mainly in eastern Kentucky.