Finance Minister Bill English says a restructuring package designed to keep Solid Energy afloat for another three years is the mining company's last chance.
Bill English. Photo: RNZ
The state-owned company, which has debts of almost $390 million and has shut down many of its operations across the country, has secured majority support from bank creditors and note holders, after a series of meetings in Christchurch on Tuesday.
The package has gone ahead, despite a pending legal challenge from the Bank of Tokyo.
The Labour Party has criticised Bill English's handling of the matter, saying he should have got all the banks to agree before announcing a deal. Spokesperson for State Owned Enterprises Clayton Cosgrove says no one knows what decision the court will make.
However, Mr English says if the Bank of Tokyo manages to scuttle the deal in the High Court, Solid Energy will have to be placed in receivership and the bank will lose its money.
The refinancing package reduces Solid Energy's debts to $239 million.
Solid Energy chairperson Mark Ford says the company now has a reasonable chance to trade its way back to a financially viable position in the next three years, when the restructured credit facilities come up for review.
The package includes $130 million of capital and mortgages from the Government and an exchange with the TSB Bank of $75 million worth of debt in return for $75 million of equity in the form of non-voting redeemable preference shares.
