Investor considers acquisition of Powerfuel assets

A company financially backed by a US-based private equity firm is considering acquiring the assets of collapsed mining company Powerfuel.

Powerfuel, the UK's most advanced clean coal company and the owner of Hatfield Colliery, fell into administration last week after being unable to plug a large funding gap. The firm needed to raise £635 million to pay for the construction of the country’s first clean coal plant, but was unable to do so. Despite the administration, its two subsidiaries are continuing to run as normal.

Now, investor 2Co - funded by private equity firm TPG and run by former BP executive Lewis Gillies - is considering the acquisition in a 'last-ditch attempt' to save the country's last clean-coal scheme.

If 2Co is successful in its acquisition, it will develop the coal power station, remove the carbon dioxide and use it to recover oil from the North Sea.

The European Union has said that it will continue to assist with the funding, but the UK government has said it will 'prioritise small 300-megawatt power stations,' in regards to future funding - something Mr Gillies is trying to convince them to change their opinion on.

He said, "The majority of our investment will go into offshore networks and it only becomes economic with a large power station. The bigger they are, the bigger the benefits. We were sure how much the company was worth until the Government made this statement on funding.

“We will only bid for the company if we're sure we are eligible for the money,” he added.