Alkane Energy has agreed to acquire coal mine methane (CMM) assets from Maltby Colliery, a subsidiary of Hargreaves Services.
The company is paying an initial consideration of £5.5m cash with an additional £2.0 payable upon completion of the full closure of the mine which is expected in first half of 2014.
Alkane said the acquisition will significantly increase its installed electricity generating capacity from CMM, operational assets and cash flow.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The group has raised £6.0m through the placement of over 22m shares which will be used to fund the acquisition. An extension of bank facilities by £3.5m with Lloyds TSB Bank will also help finance the deal.
"This latest acquisition consolidates Alkane's market leading position in CMM and it adds significantly to the group's core CMM operating capacity and provides an opportunity to further develop our Power Response business," said Chief Executive Officer of Alkane, Neil O'Brien.
"Investor support for the placing demonstrates commitment to Alkane's growth strategy. We are committed to continue to develop the group as the UK is beginning to see a tighter generating market and rising electricity prices."
Shares rose 1.29% to 29.50p at 10:03 Wednesday.
RD
-
8 of the best houses for sale with annexesThe best houses with annexes – from a period property in the Lake District to a 13th-century house with a two-bedroom annexe in Saltwood, Kent
-
Zelenskyy moves to appease Donald Trump – what happens now?Ukraine’s president Volodymyr Zelenskyy is conceding ground to secure the least-worst deal possible, says Emily Hohler
