Reduced board still considered capable

MICHAEL BERRY
Last updated 05:00 13/11/2012

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Solid Energy's board may be at half-strength, but it has the expertise to run the company until the Government fills the empty places at the board table, chairman Mark Ford says.

More than half of the state-owned coalminer's directors - including former chairman John Palmer - left this year as Solid Energy posted a woeful annual result - red ink of $40.2 million, including more than $110m of writedowns and the curtailing of underground mining.

The fallout, blamed on a sudden fall in export coal prices, has cost 450 jobs - about 290 miners and half the staff at head office are losing their jobs in aggressive restructuring.

Six of the eight directors shown in Solid Energy's most recent annual report of 2011 have left.

Ford said he did not know how long it would be before the State-Owned Enterprises Minister, Tony Ryall, appointed new directors to fill the four vacancies.

A spokeswoman for Ryall said no timeframe existed for the appointments.

Ford said the existing board was sufficient to run the company's business and health and safety requirements.

The board consists of Ford, Alan Broome, David Patterson and Neville Sneddon.

"I will wait till I'm told, but I can assure you the current board is working well and we've got to trade this company into a good, healthy position," Ford said. He said he had told Ryall that he wanted mining and health and safety skills on the board, but "he was already there".

The firm also needed financial skills to restructure the company and get it working to potential, he said.

"Real value" existed in the asset-rich company and the board needed to optimise business to extract it, Ford said.

A long-term plan adopted by the previous chairman, John Palmer, was being followed - albeit with some changes at the margins because of the effects of much-lower coal prices, Ford said.

"There's absolutely no doubt it's a great company . . . and we've just got to wait for the turnaround. It will be back to punching its weight in the not too distant future," he said.

He would not be drawn on whether the board would review the company's management, saying he was "not going to comment on those sorts of issues".

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- BusinessDay.co.nz

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