Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Solid Energy in talks with banks as finances deteriorate

Solid Energy in talks with banks as finances deteriorate

Feb. 21 (BusinessDesk) - Solid Energy, the state-owned coal miner whose chief executive quit this month, is in talks with its banks because of its deteriorating financial position.

The coal miner, which is carrying some $389 million of debt, is heading for a “significant” first half loss, chairman Mark Ford said in a statement.

“We are in discussions with our banks and Treasury on the debt and equity support required for future operations of the business,” Ford said. “A restructuring and turnaround plan for the company is being prepared by the newly appointed board in support of these discussions.”

Don Elder resigned this month after 12 years as CEO, following most of the company’s previous board of directors and hundreds of staff out the door.

In August last year Solid Energy reported a $40 million loss for the year to June 30, the mothballing of the Spring Creek underground coal mine near Greymouth and an end to plans to extend the Huntly East mine in the absence of new contracts with its main customer, the New Zealand Steel mill at Glenbrook.

Writedowns of $151.7 million were included in the result, with further post-balance date writedowns yet to be declared.

Ford said Solid Energy’s performance has also been hampered by weak world coal prices, which touched US$140 a tonne in September, down from US$224 a tonne in June.

“This coal market downturn has resulted in weak prices negatively impacting the company’s operating results for the half year,” he said.

State-Owned Enterprises Minister Tony Ryall said Solid Energy is facing “very significant financial challenges.”

“The new chair and board are focussing on a return to a core coal business which is viable at current world prices,” Ryall said. “The public is aware that there had already been restructuring at the company but more may be required.”

Ryall and Finance Minister Bill English have called a press conference on the matter.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Starts Talks On Tougher Rules For Property Speculators

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, continue to rise strongly. More>>

ALSO:

Research: ‘Ageing Well’ Science Challenge Launched

Science and Innovation Minister Steven Joyce today launched the Ageing Well National Science Challenge, confirming initial funding of $14.6 million. More>>

ALSO:

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news