Alkane to Take Over Colliery's Methane Assets

British methane producer Alkane Energy is set to acquire coal mine methane assets of Maltby Colliery, a wholly-owned subsidiary of Hargreaves Services plc situated in South Yorkshire.

The initial consideration for the acquisition of the Maltby CMM Asset is £5.5 million (€6.4m), payable in cash, with an additional payment of €2.3m payable upon completion, expected to be during the first half of next year.

The move will significantly increase Alkane's installed electricity generating capacity from CMM, bringing immediately operational assets and cash flow, thus avoiding the development lag of organically developed sites.

Alkane has also announced that it has conditionally raised £6million and agreed to issue and allot 22,222,223 ordinary shares of 0.5 pence each in the capital of the company. The Placing Shares were placed at a price of 27 pence per share.

The Alkane group operates from 20 mid-size (up to 10MW) power plants across the UK, 13 CMM only, 4 mains gas only, and 3 using both fuel sources. The company says it uses standard modular reciprocating engines to generate the electricity and sells this power through the electricity network. The engine units and other plant are designed to be flexible and transportable allowing additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency.

KPMG, joint interim liquidator of Scottish Coal, gave Hargreaves a six-week period of exclusivity to carry out due diligence.

Chief executive Gordon Banham welcomed the disposal of the Maltby Colliery assets. “Alkane is well positioned to maximise the value of these assets and this has created the basis for a deal that is beneficial to both parties.

“This disposal constitutes an important step towards realising our asset disposal targets for Maltby, which we seek to continue with the disposal of the underground assets in due course," he was quoted in business website NEBusiness.