TECO Energy sells coal subsidiary for $170 million
TECO Energy (NYSE:TE) joined the group of companies being hit by a slump in coal prices by announcing it will sell its TECO Coal subsidiary to Kentucky-based Cambrian Coal Corp., part of the Booth Energy Group.
The $170 million sale price includes future payments of $50 million if certain coal benchmark prices reach specified levels over the next five years, the firm said.
CEO John Ramil said the coal subsidiary has been an important component of the energy-related holding company since the mid-1970s, operating mines and production facilities in Kentucky, Tennessee and Virginia. The division employs about 775 people.
“When this transaction closes, it will complete a long journey returning TECO Energy to its core utility businesses,” Ramil added.
TECO has been restructuring operations for several years. In 2012, the company announced a deal to sell its international power subsidiary, TECO Guatemala, and this year, TECO acquired New Mexico Gas Co.
The coal division sale is expected to close by the end of the year.