Pike River Coal has called on its largest shareholder for financial support.
New Zealand Oil & Gas has agreed to provide the company with a short-term working capital facility of $25 million.
Pike River lost $39 million in the year to June. It says it needs more cash because the installation of hydro mining equipment at its underground mine near Greymouth is more costly and has taken longer than expected.
The company began installing the equipment last week and hopes it will be functioning shortly.
Pike River will be charged interest of 13% and fees of $600,000. It must repay the money by 15 December.
Shares in Pike River Coal closed down 1 cent at $1.13 on Thursday.
Shares in New Zealand Oil & Gas were down 2 cents at $1.27.
