1,047
edits
Changes
→2014 – 2015: CANA update
The first meeting of creditors was held on 25 Aug in Christchurch. The creditors voted against forming a creditors’ committee and voted to retain the existing Administrators, Brendon Gibson and Grant Graham of KordaMentha.<ref>guide2.co.nz, 25 August 2015, [http://www.guide2.co.nz/money/news/business/solid-energy-creditors-meet/11/28717 “Solid Energy creditors meet”], accessed September 2015</ref> The second creditors’ meeting – known as the watershed meeting – was held on 17 September. In a last-minute twist, Mach Capital, registered with the Australian Securities and Investment Commission in October 2014, requested a delay in the proceedings to give them time to make an alternative offer. However, this was rejected by the meeting.<ref>NZ Herald, 17 September 2015, [http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11514520 “Alternative bidder emerges for Solid Energy”], accessed September 2015</ref> Eighty-five per cent of the 1500 creditors voted to accept a two-and-a-half year controlled asset sell-down. Control of Solid Energy would return to the board. Staff and trades people would be paid in full, but banks would only get an estimated $0.35–0.40 in the dollar return on their $400 million debt. The Government and some bond holders would also be big losers. After the sell-down, Solid Energy would cease to exist, and 70 years of state-run coal-mining in New Zealand would come to an end.<ref>Otago Daily Times, 18 September 2015, [http://www.odt.co.nz/news/business/356252/selling-solid-energy “Selling off Solid Energy”], accessed September 2015</ref><ref>Radio NZ, 17 September 2015, [http://www.radionz.co.nz/news/national/284432/solid-energy-creditors-accept-sell-off-plan “Solid Energy creditors accept sell-off plan”], accessed September 2015</ref>
Solid Energy’s 2015 Annual Report, published in September 2015, posted a net loss of $176.7$M for the year. This loss was only 5.2% less than in the previous year, despite reduction of operating costs and cuts in staffing levels of more than 30%.<ref>Solid Energy, [http://www.solidenergy.co.nz/wp-content/uploads/2015/10/solid-energy-annual-report-2015.pdf “Solid Energy Annual Report 2015], page 6, accessed July 2016</ref>
The news continued to get worse for Solid Energy employees. On 08 Oct Solid Energy CE Dan Clifford announced that production at Huntly East would permanently cease as the mine had no prospect of returning to profitability and was unsalable. Monthly losses were in the order of $500,000. It was likely that all but three of the 68 staff jobs would be lost. <ref>Solid Energy, 8 October 2015, [http://www.solidenergy.co.nz/solid-energy-proposes-to-cease-production-at-uneconomic-huntly-east-mine/ “Solid Energy proposes to cease production at uneconomic Huntly East mine”], accessed October 2015</ref>
In Oct 2015 Cargill International, who had been in partnership with Solid Energy at the Spring Creek mine on the West Coast from 2007–2012, applied to terminate the Deed of Company Arrangement (DOCA) that most creditors had agreed to. Cargill claimed that the company was owed over $27.5 million by Solid Energy and should be entitled to be repaid in full.<ref>Business Day, 15 October 2015, [http://www.stuff.co.nz/business/industries/73039669/solid-energy-creditors-agreement-challenged-by-cargill-international “Solid Energy creditors agreement challenged by Cargill International”], accessed July 2016</ref>
In May 2016 Cargill brought a civil case against Solid Energy in the Auckland High Court, saying that it would be short-changed by the deal which had been proposed.
Putting Solid Energy into voluntary administration, plus drawing up a Deed of Company Arrangement and meeting other legal costs, incurred an expenditure of almost $9 million.<ref>RNZ, 13 December 2015, [http://www.radionz.co.nz/news/business/292003/lawyers,-accountants-cost-solid-energy-$9m “Lawyers, accountants cost Solid Energy $9m”], accessed July 2016</ref>
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