The Herald reports:
Solid Energy New Zealand’s creditors will get as much as 55 cents in the dollar after the failed state-owned enterprise’s mines were sold to three parties, including a tie-up between ASX-listed Bathurst Resources and the Talleys Group.
Administrator’s Brendon Gibson and Grant Graham of KordaMentha today said they expect returns from the asset sales to be between 45-cents-and-55-cents in the dollar, above the top end of the 35-to-40-cents range initially estimated for a managed sale, they said in a statement. Three deals were signed and are expected to settle in the first half of 2017.
Phoenix Coal, a joint venture between Bathurst and the Talleys, will buy the Stockton export operation and two Waikato mines, while Palmer MH Group’s Greenbriar purchased two Southland mines, and West Coast miner Birchfield Coal Mines purchase the Strongman and Liverpool mines on the West Coast.
The company was placed in voluntary administration last year after concluding it had no realistic prospect of refinancing $239 million of debt facilities due to mature in September 2016. The company’s downward spiral began in 2013 when slumping global coal costs exposed its commercial error in carrying substantial debt on its balance sheet to pursue a variety of novel energy projects that a previous board and management believed would give the business a future beyond coal extraction.
I guess not even Labour will oppose this asset sale.
But the collapse of Solid Energy is a good reminder that taxpayers should not own shares in commercially competitive companies. Why should we carry the can when global prices slump?