Former chair of Solid Energy resigned over future viability of coal miner

The unexplained abrupt resignation of former Solid Energy chair Pip Dunphy has been linked to disagreements with the NZ Gov over the miner's viability.

Dunphy, who quit the board after less than a year, has been revealed to have made the move after disagreements with NZ finance minister Bill English, according to Stuff.co.nz.

Leaked emails reveal she believed Solid Energy's future was in doubt.

"I received a message from Minister English yesterday before the meeting but only listened last night. His view was that the issues were resolvable and I seemed to be of the view they were not and he was keen to speak to me,"  a document unveiled by NZ Labor MP Clayton Cosgrove quotes Dunphy as saying.

"I rang him this morning and said that my impression of last night's conversation was that Ministers and their advisors thought the boards position was wrong. I said I take responsibility for that and I did not want to stand in his way of achieving what they believe is possible.

"I said in my view it was in the best interests of the company that I resign."

While the minister believed that company could be supported, his position since February has shifted.

Early last month English voiced concerns that the coal miner may no longer be viable.

The statements come on the back of Solid’s bonds, to the tune of NZ$53.9 million, being written off by its backer TSB Bank.

This equates to the total book value of its loans.

English also raised the possibility of its potential collapse.

He said that 18 months of regular briefings on Solid Energy’s financial state have not produced a stable vision for its future operation.

“It’s still not clear [if the company is viable], and that’s with very serious and competent efforts by the board and management of Solid Energy, and now, increasing focus from the banks,” he told Stuff.

“Solid Energy has done a lot of work to right-size itself, but the coal price has kept falling away in front of them and that's made it a continuing challenge.”

"Whatever actions [Solid have] taken, they then find they need to take more, and that of course is a discussion that includes their $300m of debt,” English said.

"In the end you have to work out whether there's a viable company or not and we're in that process. We're doing everything we can to secure the continuity of the company."

These statements have put the future of close to 700 workers in the air.

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