Solid Energy's Financial Position
21 February 2013
Solid Energy's trading position has continued to deteriorate despite a number of initiatives to reduce costs, preserve cash and restructure the business to meet the on-going challenging global coal market.
Solid Energy Chairman, Mark Ford, says: "We are in discussions with our banks and Treasury on the debt and equity support required for future operations of the business. A restructuring and turnaround plan for the company is being prepared by the newly appointed Board in support of these discussions. We believe that this plan can provide a sustainable future business to meet expected market conditions."
"Despite some modest recovery of international coal prices from a low of around US$140 per tonne in September last year - down from US$224 in June 2012 and a high of US$350 in January 2011 - the company expects any sustained recovery will be prolonged," he says. "The company is carrying substantial debt and the half-year result will record a significant loss.
"This coal market downturn has resulted in weak prices negatively impacting the company's operating results for the half year.
Mark Ford says that the company appreciates the on-going support of Treasury and the company's banking partners in this difficult and challenging period.