REPEAT: Air NZ plans to raise stake in Virgin Australia
REPEAT: Air NZ plans to raise stake in Virgin Australia to 25.9 percent after gaining approvals
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By Tina Morrison
Oct. 4 (BusinessDesk) – Air New Zealand, the national carrier, plans to raise its stake in Virgin Australia Holdings to 25.9 percent after gaining the necessary approvals, cementing its presence in the Australian market.
Air New Zealand received approval from the Australian Treasurer to lift its stake after gaining consent from the Foreign Investment Review Board and the antitrust Australian Competition and Consumer Commission, the Auckland-based airline said in a statement.
The New Zealand carrier plans to acquire an additional 3 percent of shares in Virgin Australia under an existing forward contract, taking its holding to 22.9 percent, and acquire a further 3 percent of the stock under creep provisions in Australian regulations, the airline said.
“We are fully supportive of the Virgin management team and strategy which provide an ideal complement to our own network and importantly, an opportunity to participate in the Australian market with a respected partner,” Air New Zealand chief executive Christopher Luxon said in the statement.
Air New Zealand formed a partnership with Virgin, providing links with its flights into Australia, after the failure of its Australian-based airline Ansett in 2001. Virgin Australia’s other major shareholders are Virgin Group and Singapore Airlines.
Shares in Air New Zealand last traded at $1.495, having gained 15 percent this year. The stock is rated a ‘buy’, according to the Reuters consensus of six analysts. Some 74 percent of the stock is owned by the government which plans to sell some of the shares as part of its policy to sell minority stakes in state assets.