Gov’t to take part in Air New Zealand capital raise

New Zealand’s government will participate in a planned Air New Zealand (NZ, Auckland Int’l) equity capital raise in June, confirming its commitment to maintaining a majority shareholding in the flag carrier, Grant Robertson, minister of finance and deputy prime minister, has assured. He made the statement in a letter on February 12, which the airline posted as a filing to the New Zealand’s stock exchange, stressing that the state would take part in the measure “given the critical role that the airline has in New Zealand’s economy and society.” The government, which currently owns 52% of Air New Zealand’s ordinary shares, is keen to retain its majority stake because of “the importance of a strong domestic air travel network” as well as the carrier’s role in supporting international tourism and exports and its status as one of the country’s biggest employers, Robertson affirmed in the letter, which was addressed to Air New Zealand chairwoman Therese Walsh. As previously reported, Air New Zealand plans to raise funds by selling shares in the company by the end of the first half of 2021. It has not yet provided details on the size of the share sale, but local media reported insiders as saying that it may have to raise NZD1-1.5 billion New Zealand dollars (USD719-1.08 billion), possibly more if border restrictions remain in place for much longer. In September 2020, the airline started to draw down on a NZD900 million (USD647 million) debt facility the government provided it with. In an Air New Zealand statement, Walsh said she was “delighted” with the confirmation of government support and also grateful for the loan, “but that was always a temporary measure.” “The ability to raise equity will help set the airline up for recovery from the impacts of Covid-19 and to continue to fulfil its purpose of connecting New Zealanders to each other and New Zealand to the world,” she said.