The future of Coal Investments, the mining group headed by the former British Coal director Malcolm Edwards, was looking increasingly uncertain last night.
With interest from traditional City backers thin on the ground for a pounds 20m rights issue, Mr Edwards has been forced to approach National Power, the generator and Coal's largest customer. He is believed to have asked National Power whether it would consider injecting up to pounds 5m into the company as part of a rescue plan.
Sources close to Coal Investments described this approach last night as "very nearly a last throw of the dice."
National Power was not saying yesterday what its response to Mr Edwards would be. "We have been approached by Coal Investments and we are listening to what they have to say," a spokesman said yesterday.
Analysts doubt whether National Power will be seduced into taking a significant investment in the embattled mining company, even though they point out that it would be in the generator's interest for Mr Edwards' company to survive. Coal Investments provides competition in the supply of coal against Richard Budge's RJB Mining Group.
Bankers and potential investors are disappointed that, after weeks of trying, Coal Investments has still not appointed a new chief executive to work alongside Mr Edwards. The company plans to appoint a chief executive and keep Mr Edwards on, perhaps in a strong marketing role.
Potential investors are believed to have been telling the company for some weeks that they will not entertain backing a rights issue if Mr Edwards retains his current position at the helm of the group without the support of a new chief executive.
In particular they are alarmed by the series of disappointing financial statements the company has been forced into making in the past few months. And the company is yet to produce its interim figures for the half-year to 30 September.
The company's debts are reportedly increasing daily and are said to be approaching the pounds 30m level.
The banks, which are led by National Westminster, UBS and Banque Indosuez, have also indicated that they will not significantly increase the company's banking facility unless investors back a rights issue and the company recruits a new chief executive.
The banks were in a key meeting yesterday afternoon.
Coal Investments was founded when Mr Edwards bought a number of redundant mines from British Coal.