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Solid Energy sells up mines

NZ Newswire logoNZ Newswire 31/10/2016

Distressed state-owned mining company Solid Energy has signed deals to sell most of its assets and says it expects the majority of staff to keep their jobs.

The company has been looking to sell assets since it was placed into voluntary administration last year owing 1500 creditors $320 million.

On Monday, it announced it had agreed to sell the Stockton export coal operation and the two Waikato mines - Rotowaro and Maramarua - to a joint venture between Bathurst Resources and Talley's Group.

It has also signed deals with Greenbriar, a privately owned South Island group, for the New Vale and Ohai coal mines in Southland and with West Coast mining business Birchfield Coal Mines for the Strongman and Liverpool mines on the West Coast.

Prime Minister John Key says the asset sales are a positive move.

"While the Crown isn't getting any money back, the creditors are getting more than they initially anticipated," he told reporters.

"More importantly, it looks like these assets are being sold as a going concern so if you take a place like Stockton, for the West Coast that's going to be some relief."

Labour, however, sees the sale as "a sad indictment of government incompetence".

"The sale represents the culmination of the inept direction of Solid Energy by National," said state-owned enterprises spokesman David Parker.

"We wish the new owners and their workers well, but record our dismay at this debacle."

New Chief Executive Tony King says there has been a focus on keeping jobs during the bidding process by selling them as ongoing concerns.

"Our expectation is that a good majority of staff will be employed by the new owners," he said.

The company's administrators, KordaMentha, on Monday also announced creditors could expect to get back between 45 and 55 cents on the dollar.

"It took some time, but this is a very positive outcome for the [Solid] board, staff and creditors. With key mining assets sold as going concerns, SENZ anticipates a good majority of the jobs will transfer to the new owners," administrator Brendon Gibson said.

The sales are expected to be settled in the first half of 2017.

Finance Minister Bill English said the fact the mines would continue to operate was a "very positive development".

"It means they will continue to provide jobs and contribute to regional economies. That is not something we could be sure of 18 months ago," he said.

As part of the deal, the Crown has agreed to take over the long-term rehabilitation of areas associated with acid mining in the Stockton plateau - at a cost of $36 million.

Solid Energy was forced into administration last year by sharply falling global coal prices and high levels of debt.

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