TECO Energy Announces Agreement to Sell Its TECO Coal Subsidiary
TECO Energy Inc. TE, +0.38% today announced that it has signed an agreement to sell its coal mining subsidiary, TECO Coal and its subsidiaries, to Cambrian Coal Corporation, a member of the Booth Energy Group. The total sales price of $170 million includes future contingent consideration of $50 million if certain coal benchmark prices reach certain levels over the next five years. The $120 million cash base purchase price is subject to post-closing adjustments.
The sale is expected to close by year end, subject to the purchasers obtaining financing, and other normal closing conditions. TECO Energy expects to use sale proceeds to repay debt and for general corporate purposes. As a result of the agreement, in the third quarter of 2014, TECO Coal will be classified as an asset held for sale and its operating results will be reported as discontinued operations. TECO Energy will record a non-cash valuation adjustment of approximately $65 million, after tax, to the carrying value of TECO Coal to reflect the sales price.
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