Teco burns off coal division with new buyer

TAMPA -- After months of delay, Teco Energy Inc. pulled out of a deal to sell its coal division to a Kentucky mining company, and has potentially found a new all-cash buyer instead.

Cambrian Coal Corp. was expected to close on its purchase of Teco Coal LLC last Friday, but the company was not able to “satisfy the conditions” set in the purchase agreement, Teco says in a filing with the U.S. Securities and Exchange Commission. While the Tampa-based energy utility didn't go into details, the Booth Energy affiliate was required to pay $80 million in cash, and depending on future coal prices, up to an additional $60 million over the next five years.

The $140 million price was a significant reduction over the $170 million the two sides agreed upon last year, which would have included a $120 million base and $50 million over the next five years. That price was reduced in February, and the sale was expected to close in March, before it was delayed to June.