Risk profile of firm 'unsuited' to full Crown ownership

Solid Energy chairman John Palmer. Photo / Martin Sykes

Outgoing Solid Energy chairman John Palmer has used the grim outlook figures at yesterday's annual results briefing to push the partial sale message.

"If you wanted the very best reason why the partial privatisation of companies like Solid Energy is important, then the commodity nature of the business and the dramatic turnaround in fortune that these businesses are inevitably going to have to deal with is the very best reason," he said.

"The risk profile of a commodity business such as Solid Energy is franky unsuited to total Crown ownership.

"The risk the shareholders should and must take constantly should not be 100 per cent Crown risk."

Up to 49 per cent of Solid Energy and three other state-owned power companies is slated for sale under the Government's "mixed ownership model".

Palmer said the company had been criticised for having "a whole lot of fat cats" in the business by comparison with other public bodies.

He said there were 472 people in the company who earned more than $100,000 but 80 per cent of those were in the coal operations business and only 12 per cent in the corporate office in Christchurch. Redundancies are looming at the headquarters.

Chief executive Don Elder, who has been in the job for 12 years, was paid $1.4 million last year. When asked whether he intended staying with the company, he said he liked what he did and the "great bunch of people" he worked with.

Palmer is retiring as chairman after six years and will be replaced by Mark Ford.