Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Share cash prop for miner

$100m from Mighty River investors earmarked for Solid Energy emergency fund.

Solid Energy is in talks with the Government and banks after almost collapsing under $389 million in debt. Photo / Greg Bowker
Solid Energy is in talks with the Government and banks after almost collapsing under $389 million in debt. Photo / Greg Bowker

One hundred million dollars raised from "mum and dad" investors in the Mighty River Power share sale could be used to keep stricken state coalminer Solid Energy afloat, Finance Minister Bill English has confirmed.

Budget documents released last week indicated that $100 million of "Future Investment Fund" or asset sales cash raised from the partial float of strongly performing Mighty River Power this year was to be allocated to "Solid Energy recovery facilities" - an emergency loan fund.

The information was blanked out or redacted from one Budget document, but in an apparent mistake, Treasury officials did not remove a reference to it in another paper.

"The Government said it was going to sell assets to invest in 'hospitals and schools', not to pay for its mistakes," Labour's state-owned enterprises spokesman Clayton Cosgrove said.

"This is a cover-up gone wrong. National is misleading New Zealanders."

Through a spokesman, Mr English said there had been no attempt to hide the fact the Government had made the money available to Solid Energy if required. The spokesman said the money had been disclosed in documents released on Budget day in May and Solid Energy had not used the money so far.

The cash was a loan facility "to ensure Solid could continue paying its bills while negotiations about its future continue".

Solid Energy is currently in talks with the Government and banks after almost collapsing under $389 million in debt earlier this year when coal prices fell and its alternative energy investments failed to pay off.

Mr Cosgrove said the disclosure of the $100 million backup from the Government could undermine the company's bargaining position.

Asset to asset

Asset sales cash diverted to struggling state-owned companies:

* Solid Energy: $100m "recovery facility".

* KiwiRail: $250m last year and $94m this year on the rail operator's "turnaround plan".

- NZ Herald

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