WELLINGTON (Reuters) - State-owned coal miner Solid Energy New Zealand Ltd SELNZ.UL will not be partly privatized before its financial performance improves, the Finance Minister said on Tuesday.
Solid Energy is one of four state-owned companies slated for partial privatization over the next three to five years as part of a government policy to raise as much as NZ$7 billion ($5.66 billion) through asset sales to reduce debt and return to a budget surplus.
“We would only take any of these companies to the market if they are in good shape for investment and Solid Energy right now certainly isn‘t,” Bill English told reporters. “We wouldn’t be planning to float it any time soon.”
Last week, Solid Energy said it was reviewing its operations as international coal demand and prices had fallen, while a strong New Zealand dollar had dented returns.
Solid Energy, which has previously been valued between NZ$1.7 billion and NZ$2.8 billion, said last week that it expected revenue to fall by about NZ$200 million in the current financial year.
Last year it produced about 4 million tonnes of mostly semi-soft and hard coking coal, much of which was exported to India and China.
“It’s got some fairly substantial issues that they have signaled. Whether it ends up being able to be floated would depend on whether they can get in suitable shape for public investors,” English said.
The first sale, a minority stake in power generator and retailer Mighty River Power Ltd MRIPW.UL, is set to be launched as soon as next month.
$1 = 1.2359 New Zealand dollars Reporting by Mantik Kusjanto; Editing by Chris Lewis