Mr Key released the papers in response to Labour's claims he misled the public about Solid Energy approaching his Government over a $1 billion investment to become the Petrobras of New Zealand, a request he says was turned down.
However, in his appearance before a parliamentary committee yesterday, John Palmer who was Solid Energy's chairman at the time said while the company made the approach, there was never any expectation the Crown would bear the cost of the required investment and a figure of $1 billion was never mentioned.
In the 2010 documents, Solid Energy is reported as tabling a proposal to transform itself into a National Resource Company (NRC) whose operations would include coal mining, lignite conversion to higher value products, coal seam, underground coal gasification, and marine methane hydrates.
"Solid Energy states that the objective of the NRC proposal is to stimulate an accelerated development and use of New Zealand's natural resources and to capture maximum value for New Zealand."
The proposal required an estimated investment of $15.3 billion but Treasury said the proposal sought indicative approval "for total capital investment (including dividends and cashflow) of $2-3 billion per annum with cumulative investment of $27 billion".
Mr Key said shortly after Solid Energy's problems, including $389 million of debt, were revealed last month, the company approached his Government seeking a capital injection "in the order of about $1 billion to turn this company into the Petrobras equivalent in New Zealand".
Mr Palmer yesterday told MPs: "Were we talking to the Government about the possibility of capital and receiving that from the Crown? The answer is no."
The documents do not appear to contain reference to a request for an injection of capital from the Crown of $1 billion or any amount, beyond a comment that "any request for capital will need to be considered on a case by case basis and in context with other requests to the Crown for capital".
However the documents do note the proposal "forecasts the introduction of external equity which is not consistent with the Government's current policies".
Mr Key has in recent days said the company approached the Government seeking approval to partner with overseas companies who would help its expansion plans, but he has said such a plan was not politically acceptable.
Labour's State Owned Enterprises spokesman Clayton Cosgrove has pounced on Mr Palmer's comments about the investment plan and that he opposed Government requests for the company to take on more debt as evidence Mr Key had misled the public over what led to the company's near-collapse to obscure the fact that his Government's oversight of it was poor.
"I don't know how many times the Prime Minister gets to make things up without someone using the 'L' word. John Key cited the increase in gearing as one of Solid Energy's downfalls while at the same time his Government was requiring an increase in gearing across the board and a greater dividend."
Mr Palmer confirmed the Government was well informed, said Mr Cosgrove, and did not ask the company to change its strategy.
Yesterday afternoon State Owned Enterprises Minister Tony Ryall was saying Solid Energy's problems were not due to its debt.
"The problems with Solid Energy come from the fact that the board made a number of investments that didn't generate the returns that they were expecting and together with the most significant collapse in world coal prices," he said.
Labour leader David Shearer said Mr Ryall's comments were "the complete opposite" to Mr Key's comment that a key contributor to Solid Energy's woes was that it "added gearing to a company that historically had not had gearing".
Mr Ryall said the Opposition was being "deliberately mischievous".
"The Prime Minister did receive advice about the financial implications of Solid Energy proposals for a significant expansion into a national resource company," he said.
"Had the ministers been supportive of the proposal it would have required the Crown to contribute in excess of $1 billion. In the event, ministers were not supportive and a formal proposal didn't eventuate."
- Adam Bennett of the New Zealand Herald
