State-owned coal miner Solid Energy chair John Palmer gave the strongest hint yet that the government will either float less than 49 per cent of the company or allow it to fully privatise major new projects, such as lignite coal developments, by selling them as subsidiaries.
Appearing before the commerce select committee for Solid Energy's annual review, Palmer said Solid Energy's capital needs and risk profile were quite different from state-owned electricity companies, which are also to be partially privatised, with the government retaining at least majority control.
Solid Energy's capital expenditure requirements could mean a "sell down to less than 49 per cent, which would allow access to capital, might be part of the solution."
Equally, Solid Energy could choose to create a subsidiary company and sell 100 per cent of that, without breaching the legislated requirement passing through Parliament at present to maintain majority Crown ownership.
Both Prime Minister John Key and Finance Minister Bill English have intimated in recent weeks that Solid Energy's part-sale is presenting different headaches for the team considering how best to organise an Initial Public Offering in the coalminer.