BIL And SIA Enjoy Dream Deal
Thursday, September 13 2001
"The more we hear of the Air New Zealand rescue package the more appalling it gets," ACT Commerce Spokesman Stephen Franks says. "The only rescue is of Brierley (BIL) and Singapore Airlines' control strategy. It gives them more than they could have dreamed of when they set out to get the shareholding cap lifted.
"BIL and Singapore Airline (SIA) control has been legitimised. The package assures each of them guaranteed board representation which previously could have been blocked if it conflicted with effective New Zealand control.
"The cap is lifted as A and B shares are merged so BIL can sell their control stake internationally when previously they would have had to find New Zealanders to take it.
"They seem to have ducked accountability for what has happened during their stewardship.
"They get the benefit of Air NZ's a half billion dollar loan facility from taxpayers which presumably no bank would give the company.
"And SIA still have a chance through Virgin to 'help' Air NZ out by 'rescuing' Ansett from Air New Zealand's statutory administration.
"Was there anything on the BIL/SIA wish list that this inexperienced Government didn't give them?
"In return they put in $150 million each, a fraction of what they would have expected originally. It was also much less than they would have had to spend if the Government had given a prompt clear decision ' either to do nothing or to increase the cap.
"It is also much less than their exposure if the Government even now had not panicked. The sound and profitable New Zealand business would have continued under any circumstances. No scenario would not have involved continued trading under new management. Under all scenarios the bankers would have insisted on continued flying of Air New Zealand planes because it has positive revenue ' unlike Ansett.
"It is plain who blinked first," Stephen Franks said.