Coal mining in New Zealand

NZ: Solid Energy seeking financial support

Solid Energy is in talks with bankers after admitting its finances have continued to deteriorate.

Radio NZ,

21 February, 2013

The state-owned company has suffered from a significant drop in world coal prices, culminating last year in the mothballing of Spring Creek mine on the West Coast and 544 redundancies nationwide in an effort to reduce costs.

On 4 February this year, chief executive Don Elder announced his resignation after nearly 13 years at the helm.

Solid Energy's debt stands at $389 million and the miner issued a profit warning on Thursday, saying its half-year result, due shortly, would show another significant loss.

Despite it restructuring to cope with the downturn, Solid Energy chairman Mark Ford said further cuts may be needed for what he described as "a difficult and challenging period".

Mr Ford said Solid Energy is in talks with banks and the Treasury on debt and equity support which it requires for future business operations and its new board is preparing a plan that would help reverse its deteriorating fortunes.

The company said although there has been modest recovery in international coal prices, it expects that any sustained recovery would be prolonged.