TECO Energy has entered into a deal to sell its wholly owned TECO Coal plus subsidiaries to Booth Energy Group’s Cambrian Coal for $170m.
The sale is part of TECO’s restructuring plan, under which the company sold its international power subsidiary TECO Guatemala in 2012 and acquired New Mexico Gas this year.
The cost includes $120m in cash and a future contingent consideration of $50m, if coal benchmark prices reach certain levels over the next five years.
Proceeds from the sale of the assets will be used to repay TECO’s debts, as well as gonig towards general corporate purposes.
TECO Energy CEO John Ramil said: “This transaction will result in a complete exit from the coal mining business.
“TECO Coal has been an important component of TECO Energy’s business mix since the mid-1970s, contributing strong earnings and cashflow for many years. We appreciate the dedicated team members at TECO Coal and the contributions they have made to TECO Energy’s success.”
The transaction, which is subject to the buyers obtaining financing and other normal closing conditions, is expected to close by the end of this year.
“When this transaction closes, it will complete a long journey returning TECO Energy to its core utility businesses,” Ramil added.
Meanwhile, TECO has issued a worker adjustment and retraining notice (WARN) to give the new owners a smoother transition for company operations.