Bidders vie to be Solid Energy's new owners

By Lee Scanlon -
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All Solid Energy land, mines and other assets have been offered for sale. Photo / Supplied
All Solid Energy land, mines and other assets have been offered for sale. Photo / Supplied

Solid Energy's new owner or owners may be known by the end of this month.

Bids in the state-owned enterprise's assets closed on September 23. The company expected to reveal the successful bidder or bidders from late this month, said chairman Andy Coupe in a statement today.

He did not say how many bids had been received. Attempts to contact him were unsuccessful.

"This first phase has run to schedule and has delivered an encouraging level of interest in the company's assets," his statement said. "There is now a complex bid evaluation process to work through, to assess the most favourable option.

"Because assets have been offered for sale as a whole or in parts, various sale configurations are possible, each with different outcomes."

Solid Energy would make a further statement, including the next steps for the company wind down, once that evaluation process had concluded, Coupe said.

The debt-laden company has been operating under a Deed of Company Arrangement since September 2015.

All land, mines and other assets have been offered for sale.

The recent rise in coal prices had been helpful for the sales process, Coupe said.

"However the fact remains that there are a significant number of coal mining assets for sale around the globe, coal prices remain highly volatile and the market fundamentals have not changed.

"Against this backdrop we have worked very hard to put the company in the best possible financial and operational position for sale, building on the efficiencies gained through successive restructures."

The hard coking coal price tanked at about US$74/tonne earlier this year. It was US$213/tonne today.

CEO resigns

Solid Energy chief executive Dan Clifford has announced his resignation effective mid-November. Current chief operating officer Tony King will step into the chief executive role.

Coupe said this would provide continuity through the sales process and the eventual wind up of the company, which was likely to take many months.

The board appreciated that Clifford had led the company through to this significant milestone before tendering his resignation, he said.

"Dan was appointed in 2014 at a time when the company was confronting significant financial pressures and continued deterioration in its trading environment. He inherited immense challenges, including the assessment of safe re-entry into, and imminent sealing of, the Pike River Mine (which the company had purchased after the fatal 2010 mine explosion).

"In the face of these very complex challenges he has made an outstanding contribution to the company, achieving both improved health and safety performance and increased operational efficiency."

He would be returning to Australia with his young family.

Coupe said King had a long history with Solid Energy. He had been closely involved in the asset sales process, and was widely respected in the coal mining industry.

A comprehensive announcement regarding the company's asset sales progress was expected to be made in mid to late October.

Looking good

Buller Mayor Garry Howard told The Westport News things were looking good.

"We'll wait for two to three weeks to see how good and who our new owner is."

He said he had no idea who had bid for Solid Energy, but said West Coast ownership would be a great outcome for Stockton.

He was hopeful, with the current coal price, of no job losses.

He understood Development West Coast had expressed an interest in Stockton Mine.

"We will work with who the purchaser is and take a very positive view of how we can work with them."

Howard said Clifford's resignation was expected. Clifford had fulfilled his commitment to get Stockton Mine to a point where a sale could happen.

Coupe acknowledged the support of a number of stakeholders, including the Government and local bodies. The co-operation of creditors during what had been a complex process had also been important.

He also acknowledged the long period of uncertainty under which staff have operated, and that the company was trying to ensure as many jobs as possible were retained under

Under the Deed of Company Arrangement, the directors are responsible for running an orderly sell-down process to sell the assets of the company.

The Crown has supported the sales process by agreeing that the environmental indemnity funding currently available to Solid Energy would also be available to any new owner. This provides certainty for affected local authorities, who have also supported the sales process by agreeing to cap any environmental claims at the indemnity level.

- Westport News

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