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.
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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.
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