The Government is pumping $25 million in cash and issuing at least $100m in loans to Solid Energy as part of a deal to restructure the troubled mining company's debts.
In return for an injection from the Crown, the banks which lent Solid Energy vast sums will convert $75m of the company's $381m debts into shares. A Treasury official said holders would not earn any income from the shares.
Solid Energy could choose if or when it bought the shares back, at face value. Finance Minister Bill English said there was no guarantee the $75m would be paid back.
"They'll only get that money back if the company's successful."
The Government's loan is repayable within three years. A source said this would be funded through the sale of Solid Energy farms in Southland.
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