TECO Energy To Sell Coal Mining Subsidiary For $170 Mln - Quick Facts

(RTTNews) - TECO Energy Inc. (TE) Monday said it has signed an agreement to sell its coal mining subsidiary, TECO Coal and its subsidiaries, to Cambrian Coal Corp., a member of the Booth Energy Group, for a total sales price of $170 million.

The total sales price 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. 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.

In connection with the signing of this agreement, TECO Coal issued a Worker Adjustment and Retraining Notice or WARN to all of its team members to allow the new owners maximum flexibility in the operations of the company.

J.P. Morgan Securities LLC acted as TECO Energy's financial advisor, and Skadden, Arps, Slate, Meagher & Flom, LLP acted as its legal advisors. Deutsche Bank Securities, Inc. acted as exclusive financial advisor, and Frost Brown Todd acted as legal advisors to Cambrian Coal Corporation.