The New Zealand government has revamped its support for Air New Zealand by a further $NZ500 million and extended the end date by almost three years as the Covid Delta lockdowns continue to keep the country’s domestic borders all but shut until Wednesday of this week.
In a statement on Tuesday morning, the airline said the revised support package, with overall liquidity support available has been increased to $NZ2 billion by taking half a billion dollars from the existing facility and allowing it to issue more preference shares to the government in the short term.
That now comprises a new agreement, which gives Air New Zealand the ability to issue up to $NZ1 billion of non-voting redeemable shares to the Crown; and a reduction in the existing secured facility from $1.5 billion to $1 billion, with an extended term to January 2026 from the original deadline of September, 2023.
The airline said the further $NZ500 million of additional liquidity will “better position the airline during the period up to its recapitalisation, including an ordinary equity raising.”
The new deal will give the airline more time to build up its operations, allowing for the impact of domestic and international border restrictions, with the aim of refunding itself via an equity issue (which the government will participate in).
In August of this year, Air New Zealand, following talks with the government, announced a further deferral of its planned equity raise until the first quarter of 2022.
“Since that announcement, the airline has been impacted by the recent domestic lockdowns and the ongoing Covid-related travel restrictions across its international network.
“The Government has recently outlined a plan of phased reopening of borders from early 2022, which, in the airline’s view, provides an indicative pathway to reopening New Zealand for international travel.
“However, the future impacts of Covid remain uncertain and circumstances continue to change all over the world.
“In that context, the airline has been considering its financial support requirements during the period up to a planned equity raising – which the airline is still targeting for the first quarter of 2022 – together with what further support and flexibility may be needed if material and unexpected events were to occur in 2022 such that it becomes prudent to consider a further delay to the planned capital raise,” Air NZ said in Tuesday’s statement.
Meanwhile Air New Zealand also revealed that it will have 7,500 passengers flying out of Auckland on Wednesday when the city’s domestic border controls come down.
The airline says there are almost 4,500 people from around the country flying into the country’s biggest city
Overall the company has almost 21,000 passengers booked across its network on Wednesday.
