NSM rescue sought

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The Independent Online
NSM, the coal mining company based in Chesterfield, applied for protection from its creditors by going into administration yesterday.

The company has heavy debts incurred by an unsuccessful diversification into building materials, and its failure to win the auction for British Coal's South Wales pits.

The administration order covers NSM's holding company, and NSM's subsidiaries will continue to trade normally, with a view to a trade sale.

John Jermine, NSM's chairman, and Chris Phoenix, chief executive, are working with the company's bankers, a consortium led by Bank of Scotland, and with Richard Fleming of Arthur Andersen, the court-appointed administrator, to put together a rescue package.

Mr Fleming has three months in which to put together a plan for the company, which owns two large deep mines in the Vale of Neath, Wales, and several deep and open mines in West Virginia.

NSM's shares were suspended at 8p on 23 December, when it said that it was "in discussion with its bankers over its immediate and long-term cash flow requirements". NSM raised pounds 40m through a rights issue just three years ago priced at 100p, in an effort to reduce its debts.

At an extraordinary general meeting on 13 January NSM's shareholders approved the sale of Clee Hill Plant, a plant hire subsidiary, although this deal is still subject to the bankers' approval.

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