Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Nats milked troubled Solid Energy for cash

David

SHEARER

Labour Leader
13 March 2013 MEDIA STATEMENT

Nats milked troubled Solid Energy for cash

Ministers pressured Solid Energy to increase its debt levels so it could return bigger dividends to the Government despite knowing the company was facing financial difficulties, says Labour Leader David Shearer.

“Bill English knew that coal prices were forecast to decline in 2009 but still urged Solid Energy to increase its gearing (debt to equity) ratio. That means ‘go out and borrow more’ despite knowing there was trouble ahead.

“The Finance Minister told Parliament today he didn’t know coal prices were going to decline. But documents obtained by Labour show that he did.

“In May 2009, shareholding ministers, including Bill English, wrote to Solid Energy expressing disappointment with the ‘forecast decline’ in its financial performance and ‘dramatic decline in profitability and dividends’.

“In it, they urge Solid Energy to increase its gearing ratio despite confirming that they’re aware there has been a ‘significant decline’ in forecast coal prices.

“At the same time, the Government was demanding increased dividends. And Solid Energy paid up, returning $130 million over four years, including $30 million in late 2011 by which time coal prices had further declined and the company was in financial distress.

“The company’s total borrowing ballooned from $13 million in 2009 to $191 million the following year and $313 million by 2012.

“John Key and his ministers are desperately dumping the blame on the Solid Energy board. But the real blame rests with them. They were urging the company to borrow more despite knowing stormy financial times were ahead. They knew the company was in trouble but continued to treat it like a cash cow.

“It’s time John Key took responsibility. While Solid Energy’s woes are complex and this is not the only factor in its decline, the pressure from ministers to borrow more and pay bigger dividends certainly contributed to its current dire financial straits,” said David Shearer.

ENDS

NOTE: Letter from shareholding ministers to Solid Energy attached
Letter_from_Ministers_to_Solid_Energy_May_2009.pdf

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Drone Strikes And Judith Collins‘ Last Stand

The news that a New Zealand citizen was killed last November in a US drone attack in Yemen brings the drones controversy closer to home.

To the US, drones are a legitimate response to the threat posed by the al Qaeda organisation and its franchisees... To the US, the drones carry the added advantage of not putting US troops at risk on the ground, and minimises the need for putting them in large numbers in bases in the countries concerned, always a politically sensitive point.

The counter-argument, well articulated by security analyst Paul Buchanan on RNZ this morning, is that this particular drone attack can be said to amount to an extra-judicial execution of a New Zealand citizen by one of our military allies, in circumstances where the person concerned posed no threat to New Zealand’s domestic security. More>>

 

Parliament Today:

Policies: Labour’s Economic Upgrade For Manufacturing

Labour Leader David Cunliffe has today announced his Economic Upgrade for the manufacturing sector – a plan that will create better jobs and higher wages. More>>

ALSO:

Gordon Campbell: On The Life And ACC Work Of Sir Owen Woodhouse

With the death of Sir Owen Woodhouse, the founding father of the Accident Compensation Scheme, New Zealand has lost one of the titans of its post-war social policy. More>>

ALSO:

Bad Transnationals: Rio Tinto Wins 2013 Roger Award

It won the 2011 Roger Award and was runner up in 2012, 2009 and 08. One 2013 nomination said simply and in its entirety: “Blackmailing country”... More>>

ALSO:

Select Committees: Tobacco Plain Packaging Hearings

The Stroke Foundation is today backing the Cancer Society and Smokefree Coalition who are making oral submissions to the Health Select Committee in support of proposed legislation to remove of all branding from tobacco products. More>>

ALSO:

Milk: Oravida Asked For Cabinet Help

New evidence released by New Zealand First today reveals Justice Minister Judith Collins used her position to manipulate the Government to help her husband’s company, Oravida, after the Fonterra botulism scare, says New Zealand First Leader Rt Hon Winston Peters. More>>

ALSO:

With Conditions: Ruataniwha Consents Approved In Draft Decision

The Tukituki Catchment Proposal Board of Inquiry has granted 17 resource consents relating to the $265 million Ruataniwha Water Storage Scheme in a draft decision that would open more of the Hawke’s Bay to irrigation. More>>

ALSO:

Fast Lanes, Campervans: Labour 'Making The Holidays Easier For Kiwi Drivers'

The next Labour Government will make the holidays easier and journeys quicker for Kiwi families driving on the roads, says Labour Leader David Cunliffe. More>>

ALSO:

Gordon Campbell: On Royalty And Its Tourism Spin-Offs

Ultimately the Queen’s longevity has been one of her most significant accomplishments. A transition to Prince Charles while the monarchy was in the pits of public esteem in the mid to late 1990s would have been disastrous for the Royal Firm. Far more congenial representatives have now emerged... More>>

ALSO:

Privacy (Again): ACC Demands Excessive Privacy Waivers

Labour: “This is just another example of ACC under National deliberately acting to deny treatment and compensation... Those who did fill in the form have effectively been victims of yet another ACC privacy breach. This time Judith Collins knew it was happening..." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news