Solid Energy's future appears less certain than the
information released by the company yesterday on its debt
restructuring by banks and a noteholder.
In addition to the $100 million Crown bail-out and and
further stand-by facility, five banks and a noteholder must
accept redeemable preferance shares in lieu of $75 million
However, the Bank of Tokyo-Mitsubishi UFJ Ltd, understood to
have exposure of about $30 million, did not agree to the deal
and a fortnight ago lodged a challenge to it in the High
Court at Auckland.
In announcing the restructuring package, Solid Energy
chairman Mark Ford made no mention of the challenge, other
than to say ''certain of the arrangements are still subject
to legal challenge''.
Finance Minister Bill English raised the prospect of a
successful challenge ending in Solid Energy's receivership.
When contacted, Solid Energy stockholder relations manager
Vicki Blyth said legal advice was that Solid Energy had
secured the financial package, as 75% (by value of the entire
debt) of the banks had agreed.
Finance Minister Bill English said ''as far as we're
concerned the deal is proceeding'', the New Zealand Herald
He has said Bank of Tokyo's legal challenge had little chance
of succeeding, but if it did there would be no choice but to
put the company into receivership.
''If the compromise is scuttled, Bank of Tokyo run the risk
of losing all their money.''