Solid Energy’s Board has agreed in principle to a financial restructuring proposal involving the company’s banking partners.
At 30 June 2013, the state-owned enterprise’s net bank debt and bonds were $381 million comprising drawn bank facilities net of cash of $286 million and Medium-term Notes issues of $95 million. The proposal, facilitated by the Treasury, will be formally considered for approval by the banks in the next couple of weeks. Bond holder co-operation will also be sought.
Solid Energy Chairman, Mark Ford, says that the proposed financial restructuring of the company would allow the refocused coal mining business to trade its way back to profitability over the next few years, but that this would have to be supported by on-going efficiencies and cash generation and improvements in the international coal market.
“We believe that the company has a good operating future and we hope that with the continued support of our shareholder and our funders, we can re-establish the company as a major employer and economic contributor in our key coal mining regions. These communities have been severely hit by the company’s financial misfortunes in the last year, including the loss of more than 700 jobs, and we hope to be in a position to reinvest in our operations when there is a sustained improvement in the market.”