Wednesday, May 29, 2024

Govt on board for Air New Zealand capital raise ​​​

The Government is continuing to support Air New Zealand as the majority shareholder by committing to participate in the national carrier’s proposal to raise capital and accelerate the recovery for the airline and the New Zealand economy.

“We are continuing to invest in Air New Zealand and provide stability and certainty as the airline positions itself for recovery and resume services to key international tourism markets and develop new destinations like New York,” said Finance Minister, Grant Robertson.

The Crown has pre-committed to participating in the $1.2 billion equity capital raise by purchasing the number of new shares necessary to retain its 51% holding, which is worth up to $602 million.

A portion of the capital raised will be used to repay loans it received from the Government during the pandemic, the Minister said.

“It has been an incredibly challenging time for Air New Zealand over the past two years. We have provided significant support to Air New Zealand to recognise its critical role in keeping the country connected to the rest of the world, including the Crown loan facility which has been drawn down by $850 million,” he said.

“Air New Zealand has also benefitted from the Government’s initiatives to support the wider aviation and transport sectors, including committing at least $620 million on air freight subsidies since the start of the pandemic to move New Zealand goods to export markets and the cancellation of Airways fees and certain passenger related fees.

“In addition, Air New Zealand has, like many New Zealand businesses, benefitted from support through the Wage Subsidy Scheme and the PAYE deferral scheme provided by Inland Revenue.

“We will also provide a standby loan facility of $400 million to ensure financial stability over the next few years. While it is not expected to be drawn upon, it is available to Air New Zealand if needed through to 2026. The arrangements for the facility have been benchmarked against equivalent private sector lending to airlines.

“As a result of the government’s support, our national carrier is in a far stronger position than many other airlines around the world to return to the skies and take advantage of the opportunities that are ahead of it. This resilience is important as we need a national airline to support economic development and provide access to international markets, and to enable the return to international tourism,” Mr Robertson said.

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