1 Aug 2015

Solid Energy raises possibility of liquidation

6:26 am on 1 August 2015

Debt-ridden state-owned enterprise Solid Energy has raised the prospect it could be liquidated.

Solid Energy's headquarters.

Photo: RNZ / Conan Young

In a statement, the company said it had told staff three options were on the table.

Labour MP Clayton Cosgrove.

Labour MP Clayton Cosgrove Photo: Supplied

"In our staff updates, we have explained that there are three potential paths for the company under consideration - some arrangement that would allow us to trade on, some kind of controlled sell-down, or liquidation," it said.

The statement stressed no final decision had been made, and there was no timeline for doing so.

However, Engineering, Printing and Manufacturing Union (EPMU) West Coast organiser Garth Elliott said he expected a decision within weeks.

"The rumours did come out earlier this week that the company was going into liquidation, so I called the head of HR and she assured me that the company had not made a decision," he said.

"But I understand within weeks a decision will be made."

Workers attend today's meeting at the Stockton mine.

Workers attend a meeting about job losses at Stockton Mine in May 2015. Photo: RNZ / Georgina Stylianou

In April, Finance Minister Bill English ruled out the Government putting more money into the company, which is struggling to service about $320 million of debt.

Mr English would not comment last night.

The Labour Party's spokesperson for state-owned enterprises, Clayton Cosgrove, said the Government had run a company that used to turn a profit into the ground.

He said someone needed to be held to account.

"This potentially has a knock-on effect to other entities like KiwiRail, businesses, suppliers to Solid Energy and it appears the only people paying the price for the incompetence, lack of governmental oversight and mismanagement are the local communities and workers."

The falling coal price has led to Mr English attending regular briefings on Solid Energy's financial state for more than a year and a half.

Its viability was questioned in April after revelations former chair Pip Dunphy quit because she did not believe any more could be done for the company.

Solid Energy has already cut almost 300 jobs at Stockton Mine on the West Coast.

Huge trucks move high-grade coal from a stockpile at the Stockton Mine near Westport.

Huge trucks carry high-grade coal at Solid Energy's Stockton Mine in 2009. Photo: 123RF