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Government to sell 20% of Air NZ

Government to sell 20% of Air NZ, trimming stake to 53%, beating referendum

Nov. 17 (BusinessDesk) – The government is selling 20 percent of Air New Zealand, worth $363 million at Friday’s price, via a bookbuild to institutions and brokers, reducing the Crown’s holding to 53 percent and beating a referendum on asset sales.

Craigs Investment Partners, Deutsche Bank and Goldman Sachs have been hired for the selldown, which will start tomorrow and be completed by Tuesday evening, according to a statement from Finance Minister Bill English and State-Owned Enterprises Minister Tony Ryall.

Air NZ shares last traded on Friday at $1.65 and have climbed 27 percent this year. The stock will be halted from trading on the NZX and ASX tomorrow pending the sale and resume trading on Wednesday.

“An off-market sell down is fast and efficient, which is important when working with a company that is already listed,” English said.

“Air New Zealand’s share price has recently been trading at five-year highs and the NZX is up by around 25 percent over the past 12 months, so it is an opportune time to sell down the Crown’s shareholding to maximize proceeds for the benefit of New Zealand taxpayers,” the ministers said in a Q+A that accompanied their media release.

The sale is being done in the same week a Citizens Initiated Referendum kicks off asking the question
“Do you support the Government selling up to 49% of Meridian Energy, Mighty River Power, Genesis Power, Solid Energy and Air New Zealand?” Voting in the referendum starts on Nov. 22 and runs through until Dec. 13.

English and Ryall cited other selldowns of listed companies on the NZX in the past 12 months as examples of the success of an off-market sale process. Auckland International Airport, Trade Me Group, Summerset Group and Sky Network Television also saw the departure or reduction of the holding of a major shareholder.

While the Air New Zealand stake the government has earmarked for sale had a market value $363 million as at Friday, the four other selldowns cited all went at discounts to the last trading price.

Proceeds from the sale are to go to the government’s Future Investment Fund, adding to the $3.6 billion raised from initial public offerings in Mighty River Power and Meridian Energy.


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