19 Dec 2013

Bank fails in challenge to Solid Energy restructure

8:30 am on 19 December 2013

A bail-out of Solid Energy looks more likely to go ahead, after a legal challenge failed in court.

The case in the High Court in Auckland was taken by the Bank of Tokyo Mitsubishi, which objected to a scheme which would swap debt worth $75 million for non-voting, redeemable preference shares in Solid Energy.

In return, the Crown would inject cash and loans into the company.

Four other banks accepted the deal, but the Bank of Tokyo Mitsubishi argued the preference shares could prove worthless.

Solid Energy's debts were worth $381 million in June.

It is not known if the decision will be appealed, but the Government has previously said Solid Energy will go under if the rescue plan is not approved.