Teco delays coal division sale again

TAMPA -- Teco Energy Inc. will hold on to its coal operations just a little longer as the potential buyer tries to secure financing on what could be a $140 million deal for the utility.

Cambrian Coal Corp. now has until June 5 to come up with the $80 million cash base price for Teco Coal, according to a filing with the U.S. Securities and Exchange Commission. Depending on how well coal prices do over the next five years after the sale, Cambrian could owe Teco $60 million afterward as well.

“We remain committed to exiting the coal business in the most effective way,” Teco CEO John Ramil says in a release. “We continue to believe that working cooperatively with Cambrian and providing it with additional time to work with its lending group to obtain financing for the transaction is the preferred way to meet that commitment. “

Teco originally planned to sell its coal operations to the Booth Energy affiliate last year for a base price of $120 million, along with an additional $50 million over the next five years if certain benchmarks were met. However, Teco reduced that price in February, with the hopes of closing the deal by March.

The Tampa-based utility, which trades on on the New York Stock Exchange under the symbol TE, took a $76.4 million charge from discontinued coal operations in 2014. That reduced the earnings per share last year by a third, from 92 cents to 58 cents, based on revenue of $2.6 billion.

Teco Coal owns and operates coal-production facilities in Kentucky, Tennessee and Virginia.

Teco shares closed Monday at $19.62, up 1.5% from the previous Friday on lower-than-average volume. Shares for the utility have traded as high as $22.02 per share.