Hargreaves Services withdraws loan offer to UK Coal

(Adds UK Coal comment, details, background)

LONDON, June 11 (Reuters) - British coal producer Hargreaves Services has withdrawn a loan offer to rival miner UK Coal saying it could not agree to a loan plan with other parties discussing the managed shutdown of UK Coal.

UK Coal, Britain's largest coal producer, went into administration last year and its business has since deteriorated further due to competition from cheaper coal producing markets and the strength of the pound because it is paid in dollars.

Hargreaves Services (Frankfurt: A0HMDY - news) had been in discussions to provide UK Coal with a 5 million pound ($8.4 million) loan.

UK Coal, whose two deep coal mines employ around 1,300 people, has been seeking government and private loans to help wind down its business over the coming 16 months.

"It is with regret that Hargreaves announces today that, despite the efforts of the stakeholders, it has not been possible to secure a plan that it is able to support," Hargreaves said in a statement.

UK Coal said on Wednesday it was pursuing other options for its managed closure plan.

"UK Coal will continue to work with government, Harworth Estates, employees and the trade unions and will provide an update in the coming days," the company said in a statement.

The government pledged in April to provide UK Coal with a 10 million pound loan to help fund the closure.

Regeneration company Harworth Estates was not immediately available for comment. ($1 = 0.5956 British Pounds) (Reporting by Karolin Schaps, Editing by Paul Sandle and Susan Thomas)