According to The Press, the NZ government aims to inject Solid with $NZ25 million ($A22.1 million) in cash and another $130 million in loans, while Solid’s bank lenders will be required to inject $75 million in return for “non-voting redeemable preference shares”.

“This is effectively an interest-free loan to the company,” the newspaper reported.

State Owned Enterprises Minister Tony Ryall reportedly said the banks were being asked to “waive some of their rights”, with a Treasury official adding that this referred to the right to make an application that would place Solid in “receivership”.

While Solid did not detail much about the plan in its release, it said the Treasury-facilitated proposal would be considered for approval by the banks in the next couple of weeks with bond holder cooperation also sought.

Solid chairman Mark Ford said the proposed financial restructuring would allow it to trade its way back to profitability over the next few years, on the basis it was supported by ongoing efficiencies and improvements in the international coal market.

“We believe that the company has a good operating future and we hope that with the continued support of our shareholder and our funders, we can re-establish the company as a major employer and economic contributor in our key coal mining regions,” Ford said.

“These communities have been severely hit by the company’s financial misfortunes in the last year – including the loss of more than 700 jobs – and we hope to be in a position to reinvest in our operations when there is a sustained improvement in the market.”

Solid’s bank and bonds net debt position was $381 million at the end of June.