Solid Energy 'in a precarious position' – Key
By Peter Wilson
Solid Energy is in a precarious position and an announcement on its future could be made within weeks, Prime Minister John Key says.
The state-owned coal mining company is crippled by debts of more than $300 million and has struggled to survive for more than a year.
The Government, the company and the banks it owes money to have been have been looking for a way out amid speculation it could be put into liquidation
"It's in a precarious position, quite a bit of work has been going on behind the scenes to see what the next step will be," Mr Key said at his post-cabinet press conference.
"Liquidation isn't the Government's number one preferred option - that would mean the company would stop trading and its assets would be sold to repay creditors.
"There are other options that would find more favour with the Government but the call will be made by the banks, it's essentially their debt."
Mr Key wouldn't discuss what the other options were but said the Government wasn't going to put more capital into Solid Energy.
"There are a range of options... it's at a very delicate stage."
He says an announcement won't be made this week but could be made "within a few weeks".
Finance Minister Bill English said in April there wouldn't be any more Government money to keep Solid Energy going.
The company has already cut nearly 300 jobs at its Stockton Mine on the West Coast and there's concern in the region about the possibility of the company collapsing.
It told staff last week there were three potential paths ahead - an arrangement that would allow it to continue operating, some kind of controlled sell-down, or liquidation.
It said no decisions had been made.