Solid Energy's financial woes became public in August last
year, when it flagged the likelihood of a $200 million slump
That statement was followed shortly after by the announcement
of about 450 redundancies around the country.
Then, in November, Solid Energy booked an annual profit
plunge of 146% and stated a $40 million loss, because of a
slump in global coal prices. There was no repeat of the
previous year's $30 million dividend.
Following a global coal price high of $US350 ($NZ419) in
January 2011, the price slumped to $US140 but since retraced
some losses to trade around $US224 in June.
Three weeks ago, Solid Energy's chief executive of 12 years,
Dr Don Elder, resigned, effective immediately, amid criticism
of having too many developmental projects under way in recent
The lion's share of its more than 4 million tonnes of annual
production is from the West Coast, and the boutique
lignite-to-briquette pilot plant near Mataura, had been
untouched by earlier restructuring.
The state-owned enterprise ministers will have to decide in
the weeks ahead which divisions of Solid Energy can be sold.
Solid Energy chairman Mark Ford released a statement on
Thursday outlining how the company's trading position was
continuing to deteriorate, despite initiatives to reduce
costs, preserve cash and restructure, in the face of the low
global coal prices.
''We are in discussions with our banks and Treasury on the
debt and equity support required for future operations of the
''A restructuring and turnaround plan for the company is
being prepared by the newly appointed board, in support of
these discussions,'' Mr Ford said.
He warned that Solid Energy was ''carrying substantial debt''
and the half-year result to be released shortly ''will record
a significant loss''.