Solid Energy is at a crisis point, with a Government bailout almost inevitable, mine closures possible and further job cuts likely in another restructure to try to salvage the debt-ridden coal mining company.
The state-owned enterprise yesterday revealed it was in talks with its banks and the Government over its future after its debt rose to $389 million and a further “significant loss” would be in its half-year result.
The company posted a $40 million loss last year.
So Solid Energy geared itself for debt which it used to pay massive salaries to its executives and boost its dividends, now it’s collapsed and the taxpayer will bail it out.
I guess that’s the advantage of having the John Key National government running things: they bring the benefit of their commercial experience to the public sector, so the state-owned assets they oversee can be stripped and gutted and the losses socialised as effectively as their privately owned counterparts.