May 21, 2013

Stricken state-owned coal miner Solid Energy’s future appears bleak according to a recently completed report on the company

Key said corporate advisers KordaMentha had just completed their report on the company which is on the brink of collapse after being crippled by low coal prices and almost $400 million in debts.

“They would indicate that some parts of the business are in better shape than others” Key told reporters yesterday.

“So in totality it’s probably got no equity left and significant debts but that doesn’t mean there aren’t some parts of it that are potentially genuine businesses. The question is how the Government can take the next step.”

Key said there were “many options on the table”.

“None of them are terribly palatable but we’re doing our best to try and resolve what is a quite broken company.”

Key expected State Owned Enterprises Minister Tony Ryall and Finance Minister Bill English would have “clarity” about the next steps within a month.

The indebted state-owned enterprise announced more than 100 job cuts earlier this month and English said the Government was prepared to let the company fail if it could not come up with a viable turnaround plan.

Chairman Mark Ford says he has “total confidence” Solid Energy’s s revamped business plan would be acceptable to the Government and banks.

Asked if Ford’s plan was viable, Key yesterday said he hadn’t seen it.

“If it is that would be great. That’s not the advice we’ve had just yet.”