Tampa-based TECO Energy announced an agreement Monday to sell its coal subsidiary in a $170 million deal that is expected to close by the end of the year.
TECO, the parent company of Tampa Electric, said Cambrian Coal Corp. agreed to purchase the coal operation, which includes coal production facilities in Kentucky, Tennessee and Virginia.
Cambrian is part of the Booth Energy Group, a company that produces coal using the underground and surface mining methods in the central Appalachia coal fields of Kentucky, West Virginia and Virginia.
"This transaction will result in a complete exit from the coal mining business," said TECO Energy CEO John Ramil.
"TECO Coal has been an important component of TECO Energy's business mix since the mid 1970s, contributing strong earnings and cash flow for many years.
"We appreciate the dedicated team members at TECO Coal and the contributions they have made to TECO Energy's success," he said. "When this transaction closes, it will complete a long journey returning TECO Energy to its core utility businesses."
The $170 million deal includes a $120 million cash base purchase price that is subject to post-closing adjustments and a $50 million contingency if certain coal benchmarks are reached in the next five years.
TECO is an energy-related holding company with regulated electric and gas utilities in Florida and New Mexico. Tampa Electric serves more than 700,000 customers in west-central Florida; Peoples Gas System serves more than 350,000 customers across Florida; and New Mexico Gas Co. serves more than 513,000 customers across New Mexico.
After the announcement, TECO's stock price gained 54 cents, or 2.95 percent, to close Monday at $18.83.
Contact Ivan Penn at email@example.com or (727) 892-2332. Follow @Consumers_Edge.