Solid Energy still has cash in the bank, but is in a precarious position.

The stark diagnosis comes from the Prime Minister.

The state owned company got into trouble with ambitious projects and falling coal prices, forcing it to negotiate another restructure in a bid for lenders to accept more losses on their loans.

John Key says he can't say much, in case it upsets delicate negotiations with the banks.

"I don't think I'm overstepping the line to say it still has equity, and it still has cash in the bank."

He says the company's been in a delicate position for some time, and it's now up to them to negotiate with the banks.