25 Feb 2013

Prime Minister criticises Solid Energy

8:00 pm on 25 February 2013

The Prime Minister has blamed the previous board and management of the coal company Solid Energy for getting it into strife.

The company now has a debt of $389 million and is talking with its banks and the Government about a bail-out.

John Key has told his post-Cabinet news conference that the board and management of Solid Energy made a series of mistakes.

Mr Key said they over-valued how much coal would be worth and made investments which turned out to be basically worthless.

As well, he said Solid Energy had inadequate coal reserves.

Mr Key said the Government disagreed with the company about its plans in 2009 to expand, but despite that it borrowed heavily to diversify.

By 2012 it was apparent there were problems and later in the year he said the board approached the Government to say it agreed it had over-estimated coal prices.