- Air New Zealand (AIZ) defers its capital raise plans until 2022, as COVID-19 continues to hamper the tourism sector
- AIZ first announced plans to fundraise back in April, with the airline saying it would raise extra cash before September 2021
- But, the New Zealand Government advises it can’t commit to providing extra capital given the country’s closed border policy
- Given this, the raise will be delayed, as will a planned interest rate increase to the Crown Standby Facility
- Shares in AIZ are up 1.07 per cent at $1.42 per share at the close of market on Friday, August 13
Air New Zealand (AIZ) will defer its capital raise plans until 2022, as COVID-19 continues to hamper the tourism sector.
The airline first announced plans to raise capital in April this year, stating it would have components of both equity and debt and be completed by September.
But, in an update released to market on Friday the company said it had received advise from the New Zealand Government which prompted them to delay.
Specifically, AIZ said the government was no longer able to offer a firm pre-commitment under the raise due to the current environment and pandemic.
New Zealand is committed to pursuing a COVID-19 elimination strategy, meaning its borders will remain shut for some time to come.
This is the second time AIZ has been forced to delay the planned capital raise, as COVID-19 continues to affect the country’s border restrictions.
The government, which is a majority shareholder in the airline, did re-affirm its support to Air New Zealand.
In particular, the government has offered to abandon a planned interest rate increase to a loan facility for AIZ.
From October, the Crown Standby Facility interest rate had been due to increase by 1 per cent, but that will now be dropped.
Shares in AIZ were up 1.07 per cent at $1.42 per share at the close of market on Friday, August 13.