SIA's and BRY's Statements On Air New Zealand

SIA's and BRY's latest statements.

SIA's

SIA has today reached agreement with Air New Zealand, Brierley Investments Limited ("BIL") and the New Zealand Government on a NZ$300 million equity injection by SIA and BIL and a NZ$550 million credit facility to be provided by the New Zealand Government. This agreement follows Air New Zealand's decision to place the Ansett Group into voluntary administration and the impact of this decision on Air New Zealand's balance sheet.

Under the terms of the agreement, SIA and BIL will each subscribe for NZ$150 million in new shares at the lower of NZ$0.67 per share (being the volume weighted average price of Air New Zealand's A and B shares traded on the New Zealand Stock Exchange on 7 September 2001) and the volume weighted average price of A and B shares over the 10 trading days preceding the meeting of Air New Zealand's shareholders to approve the transactions. Based on an issue price of NZ$0.67 per share, SIA's pro forma shareholding in Air New Zealand after the share placement will be approximately 34 per cent. A lower issue price will mean a higher shareholding.

As part of the agreement, the New Zealand Government will provide Air New Zealand with a Note facility of up to NZ$550 million. Upon drawdown of this facility, Air New Zealand will issue to the Government two tranches, in equal proportions, of 7 year and 10 year subordinated notes. In addition, the Government will provide Air New Zealand with a two year revolving credit facility of up to NZ$200 million for working capital purposes. Any amounts drawn under this facility will be set off against the NZ$550 million Note facility.

It is the intention of the parties that the equal injection and credit facility will provide Air New Zealand with sufficient capital and financial flexibility to maintain its operations following the decision to place the Ansett Group into voluntary administration. The agreement is conditional on various matters, including all necessary shareholder and regulatory approvals, the cessation of any further financial support for the Ansett Group, appropriate waivers and consents from Air New Zealand's creditors and financial due diligence on the company. ...2/NO. 18/01 - 2- 13 September 2001 Under the agreement, SIA, BIL and the New Zealand Government have agreed that each of SIA and BIL will have the right to appoint three Directors to the Board out of a total of nine Directors. One each of the SIA and BIL appointees must be a New Zealand national, to be appointed after consultation with the New Zealand Government. SIA's, BIL's and the New Zealand Government's agreement will be sought on the appointment of the Chairman of the Board. The three parties are committed to working closely with one another to ensure that an appropriate level of focus is brought to bear in stabilising Air New Zealand's financial position following the losses sustained by the Ansett Group and in maintaining the airline's strong track record and its position as New Zealand's national carrier.

Commenting on the agreement, SIA's deputy chairman and chief executive officer, Dr Cheong Choong Kong, said: "We believe that this equity injection and the Government's credit facility are important and positive steps. They are needed to strengthen Air New Zealand's financial condition following the difficult decision to place Ansett into voluntary administration and the effect this has had on the company's balance sheet".

"We believe that Air New Zealand can still be a successful Australasian airline. By strong synergies with Singapore Airlines, Air New Zealand can continue to grow. The reality is that it will require greater effort,'' Dr Cheong said.

With regard to the Ansett Group, Dr Cheong added: "On behalf of SIA, I would like to say that we are extremely sad that Ansett had to be put into voluntary administration. In spite of the strategic fit between Air New Zealand and Ansett, Ansett's mounting losses and Air New Zealand's resulting weak financial position meant that Air New Zealand could not continue to support Ansett. We feel deeply for the loyal Ansett employees who have been working so hard, especially during these extremely difficult times".

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BRY's

Brierley Investments Limited ("BIL") has today reached agreement with Air New Zealand, Singapore Airlines ("SIA") and the New Zealand Government on a NZ$300 million equity injection by BIL and SIA and a NZ$550 million credit facility to be provided by the New Zealand Government. This agreement follows Air New Zealand's decision to place the Ansett Group into voluntary administration and the impact of this decision on Air New Zealand's balance sheet.

Under the terms of the agreement, BIL and SIA will each subscribe for NZ$150 million in new shares at the lower of NZ$0.67 per share (being the volume weighted average price of Air New Zealand's A and B shares traded on the New Zealand Stock Exchange on 7 September 2001) and the volume weighted average price of the A and B shares over the 10 trading days preceding the meeting of Air New Zealand's shareholders to approve the transactions. Based on an issue price of NZ$0.67 per share, BIL's pro forma shareholding in Air New Zealand after the share placement will be approximately 37%. A lower issue price will mean a higher shareholding.

As part of the agreement, the New Zealand Government will provide Air New Zealand with a Note facility of up to NZ$550 million. Upon drawdown of this facility, Air New Zealand will issue to the Government two tranches, in equal proportions, of 7 year and 10 year subordinated notes. In addition, the Government will provide Air New Zealand with a two year revolving credit facility of up to NZ$200 million for working capital purposes. Any amounts drawn under this facility will be set off against the NZ$500 million Note facility.

It is the intention of the parties that the equity injection and credit facility will provide Air New Zealand with sufficient capital and financial flexibility to maintain its operations following the decision to place the Ansett Group into voluntary administration. The agreement is conditional on various matters, including all necessary shareholder and regulatory approvals, the cessation of any further financial support to the Ansett Group, appropriate waivers and consents from Air New Zealand's creditors, and financial due diligence on the company.

Under the agreement, BIL, SIA and the New Zealand Government have agreed that each of BIL and SIA will have the right to appoint three Directors to the Board out of a total of nine Directors. One each of the BIL and SIA appointees must be a New Zealand national, to be appointed after consultation with the New Zealand Government. BIL's, SIA's and the New Zealand Government's agreement will be sought on the appointment of the Chairman of the Board. The three parties are committed to working closely with one another to ensure that an appropriate level of focus is brought to bear in stabilising Air New Zealand's financial position following the losses sustained by the Ansett Group and in maintaining the airline's strong track record and its position as New Zealand's national carrier.

Greg Terry, Chief Executive Officer of BIL, said: "We believe that the solution achieved today at Air New Zealand not only ensures that Air New Zealand has a viable financial future, but also in the longer term, restores value for BIL and all our shareholders. This solution provides the opportunity for us to rebuild value, which would otherwise have been lost."

FINANCIAL UPDATE

As a consequence of Air New Zealand's Board decision to place Ansett in voluntary administration and to write down the carrying value of its investment in Ansett to A$1, BIL will reduce the carrying value for its associate, Air New Zealand, by approximately US$163.1 million, representing its equity accounted share of the NZ$1.321 billion charge taken by Air New Zealand. The non-cash charge to the Profit & Loss Account will be disclosed as an exceptional item in BIL's results for the financial year ended 30 June 2001 which will be announced on 27 September 2001.

Following the disposal of its 28.7% interest in James Hardie Industries Limited in May of this year, it was anticipated that BIL would return to profitability in the year ended 30 June 2001. However, as a result of this significant write-off at Air New Zealand, BIL is now expected to report a loss for the year ended 30 June 2001.

ENDS

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