The struggling mining firm, which in February was struck by a devastating fire at its Daw Mill deep mine, near Coventry, England, will be run by administrators PricewaterhouseCoopers and BDO LLP after racking up a pension fund deficit of at least $747 million, the company announced Tuesday.
U.K. Coal and British Energy Minister Michael Fallon said the move, reached in a compromise with creditors, will save 2,000 mining jobs at the company's remaining facilities.
But the Daw Mill colliery will be closed permanently, resulting in the loss of 350 jobs. A total of 2,077 deferred pensioners who have left the company but are not yet retired, as well as 971 active employees, will see a 10 percent reduction in their pensions.
The company's 3,756 existing pensioners will see no changes in their checks.
Under the deal, Britain's Pension Protection Fund -- a government lifeboat entity set up to rescue sinking corporate retirement funds -- will take over responsibility for paying the former miners' pensions.
The reforms also include a restructuring of the mining company under which the assets of its remaining viable operations were put into individual companies owned by a new business to be operated as an employee trust, the BBC reported.
"Today is very much a day of mixed emotions, but this is the best outcome that it was possible to achieve," U.K. Coal chief executive Kevin McCullough said. "Entering administration and the subsequent restructuring was the only way we could preserve any of the business and while I'm delighted we've saved 2,000 jobs, we've also had to make some very difficult decisions."
"I would like to thank all parties involved for the tremendous effort they have made to ensure a future for U.K. Coal at this very difficult time," Fallon added in a statement. "We have worked tirelessly with U.K. Coal over the past four months to provide the best help and advice to the company across Whitehall and local government."
The energy minister said the government's priority now "must be to continue to support former Daw Mill workers into employment as soon as possible."
The mining company was already financially troubled before the Daw Mill fire, which began Feb. 22 and resulted in an interim closure a month later. The last remaining mine in the once-mighty North Warwickshire coal fields, Daw Mill employed 650 miners at the time.
Local officials said they were disappointed but not surprised by the move to permanently close the mine, the Tamworth Herald reported.
"It's perhaps inevitable that this had to happen after the fire," North Warwickshire Councilor Ray Sweet told the newspaper.
But Sweet, who worked at the nearby Baddesley colliery for 37 years, admitted the closure marked "a very sad day for me and for those 350 employees who will be made redundant and sad for North Warwickshire as it marks the end of our long mining heritage."