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The $2.2 billion recapitalisation package is made up of three parts:
- a $1.2 billion pro rata renounceable Rights Offer, allowing eligible shareholders an opportunity to buy additional shares in Air New Zealand at a discount to the prevailing share price. The Crown has committed to supporting the Rights Offer and will participate in the Rights Offer to retain a 51% shareholding in Air New Zealand. The Rights Offer is underwritten, other than in respect of the Crown participation;
- a $600 million issuance of redeemable shares to our majority shareholder, the Crown, of which approximately $400 million we intend to refinance through an approximately $600 million debt capital markets issuance that will be undertaken by 30 June this year, subject to market conditions; and
- a new $400 million Crown loan to replace the existing Crown loan facility, which is available to the airline through to January 2026.
Air New Zealand Chair Dame Therese Walsh says, “While there will still be bumpy skies ahead over the next few years, the moment is right for Air New Zealand to raise equity, recapitalise its balance sheet and repay the loan it received from the Crown during the Covid crisis. This is an important step in refuelling for our recovery.
“When Covid struck in early 2020 we took decisive action. Routes were closed, planes parked, and the number of Air New Zealand employees was reduced by almost a third. Almost overnight, passenger numbers halved, and flight demand dropped 95 per cent.
“With New Zealand’s support, and Crown loan funding, we were able to keep the country connected. While many airlines were grounded, we’ve flown every day, bringing in vital supplies, flying Kiwis home and keeping New Zealand exports moving around the world.”
“Covid isn’t behind us yet. There will still be significant challenges and uncertainties to face, and it will take time to recover, but Air New Zealand is committed to rebuilding a stronger, more nimble airline that delivers for all New Zealanders”, said Dame Therese.
Commenting on the recapitalisation package Air New Zealand Chief Executive Officer Greg Foran said, “This is an important next step, as we are preparing to return to key international destinations, welcome international visitors back to New Zealand and launch a new service to New York.
“The last two years haven’t been easy for our shareholders with the suspension of our dividend payments since 2020 and the decrease in equity reserves. Our shareholders have been top of mind as we took action to help mitigate the impact of the pandemic while positioning the airline to survive, then revive and finally thrive in the years to come.
“We’re now focused on growing our domestic network, optimising our international routes and streamlining our fleet to more efficient and sustainable aircraft. And we’re developing more benefits and value for our millions of Airpoints members.
“Our Kia Mau strategy sets a clear flight path for the coming years and while there will always be significant risks for the airline, importantly, our recapitalisation plan will help position us to thrive again”, said Mr Foran.
The Rights Offer
As part of the recapitalisation, Air New Zealand is raising $1.2 billion through a pro rata renounceable Rights Offer. This will enable eligible shareholders to purchase up to 2 new shares for every 1 share they own in Air New Zealand at an offer price of NZ$0.53 per share. Those shareholders who take up their full entitlement will also be able to apply for additional shares in the shortfall bookbuild process. Shareholders who choose not to participate have the option of selling some or all of their rights on the NZX or, if they do nothing, they may receive some value through the shortfall bookbuild process, if the price determined in the shortfall bookbuild process exceeds the offer price.
The Rights Offer will open from Wednesday, 6 April 2022 and close on Monday, 2 May 2022, and is open to eligible Air New Zealand shareholders on the airline’s share register as at 7:00pm NZT on the Record Date of Tuesday, 5 April 2022 who are located in New Zealand and Australia and a limited number of other jurisdictions.
