Prime Minister John Key says none of the options for dealing with the debt-ridden Solid Energy are particularly palatable but the Government is doing its best to try to fix a broken company.
The state-owned coal miner is grappling with debts of nearly $390 million and earlier in May announced a further 105 job losses.
Mr Key said on Monday a recent report from consultants KordaMentha has shown some positive signs.
"There's been some work done for the Government by external consultants and I think they would indicate some parts of the business are in better shape than others.
"So in totality it's probably got no equity left and significant debts, but that doesn't mean there aren't some parts of it that are potentially genuine business."
Mr Key would not elaborate on what these were. He said what happens next remains unclear because the Government still has a big range of options for the troubled company to flesh out.
Finance Minister Bill English has previously suggested that Solid Energy could be left to go under.