Key: Solid Energy 'in precarious position'

  • 03/08/2015
Key: Solid Energy 'in precarious position'

Prime Minister John Key has hinted there will be an announcement on the future of cash-strapped Solid Energy in the coming weeks.

Speaking at his post-Cabinet news conference this afternoon, Mr Key said the state-owned enterprise is "in a precarious condition", after revelations it is in more than $300 million-worth of debt.

He says the Government and board are working with banks to sort out the next move.

"Quite a bit of work is happening behind the scenes to see what the next step is. Obviously we're very conscious of a number of important stakeholders – firstly those that work for Solid Energy.

"You've also got the creditors, of which there are quite a number of companies and some are quite small ones.

"Finally you've got the interests of the banks. We've made it clear to the banks that they need to sort the situation out."

Mr Key has ruled out a cash injection or a Government guarantee, but says the call will be for banks to make.

"Liquidation is not the number-one preferred option of the Government … There are other options that would be in more favour with the Government. But of course the call is one that is made with the bankers."

Cabinet discussed the future of the company today, and though a complete asset sale was not ruled out, Mr Key said it wasn't something being actively considered.

"I'm not aware of foreign buyers looking to buy stock, but I can't rule it out. It's a significant asset and someone ultimately could."

He wouldn't discuss further details of the discussions, but said the Crown was doing "as much as it could for a company in a very precarious position".

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