The Government is holding a briefing on Solid Energy's
worsening financial position.
The Government and the company released statements saying
Solid Energy was in discussions with its banks as it
struggles with low coal prices.
Solid Energy's shareholding ministers, Finance Minister Bill
English and State Owned Enterprises Minister Tony Ryall said
the company's board was working with Treasury, advisers and
the banks about further restructuring options, "with the aim
of returning the company to a sustainable financial
The company - which was once a candidate for partial sale -
has laid off hundreds of workers on the West Coast, Huntly
and from its Christchurch head office. There has been a board
cleanout and its long-serving chief executive Don Elder
announced his departure earlier this month.
"Discussions are required because the position of the
state-owned enterprise has continued to deteriorate despite
the restructuring that has already taken place,'' Mr English
said this afternoon.
Mr Ryall said Solid Energy's debt stood at $389 million and
its interim result, which is due shortly, will show
"The new chair and board are focusing on a return to a core
coal business which is viable at current world prices. The
public is aware that there had already been restructuring at
the company, but more may be required,'' said Mr Ryall.
"The Government appreciates this is a very unsettling time
for employees and suppliers and the company's wider
stakeholders, but it is a process which must be worked
through carefully and properly.''
Solid Energy's chairman, Mark Ford, said a restructuring and
turnaround plan for the company was being prepared by the
newly appointed board.
"Despite some modest recovery of international coal prices
from a low of around US$140 per tonne in September last year
- down from US$224 in June 2012 and a high of US$350 in
January 2011 - the company expects any sustained recovery
will be prolonged,'' he said.