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- Air New Zealand (AIZ) has expanded its government loan facility but will push back its proposed capital raising due to the evolving market situation
- The facility will be increased by NZ$600 million (roughly A$553.15 million) to NZ$1.5 billion (roughly A$1.38 billion)
- It will be offered in two tranches — NZ$1 billion (roughly A$920 million) and NZ$500 million (roughly A$460.96 million) — each at a reduced interest rate
- A proposed financing, which was originally due for completion by June 30, 2021, has also been pushed back to September 30
- Air New Zealand is up 0.9 per cent to $1.68 per share
Air New Zealand (AIZ) has expanded its government loan facility but will push back its proposed capital raising due to the evolving market situation.
The facility, which was made available to the airline by the New Zealand Government in March last year, will be increased by NZ$600 million (roughly A$553.15 million) to NZ$1.5 billion (roughly A$1.38 billion).
An initial tranche of NZ$1 billion (roughly A$920 million) will be offered at a reduced interest rate, from between seven and eight per cent to 3.5 per cent per annum, while a second tranche of NZ$500 million (roughly A$460.96 million) will be offered at an interest rate of five per cent compared to the previous nine per cent.
The facility will now be available to Air New Zealand until September 2023 — an extension of 16 months.
“We’ve seen some clearing of COVID-19 clouds recently, with the extension of the airfreight capacity scheme, the rollout of the vaccine and the opening of the trans-Tasman bubble on 19 April,” said Dame Therese Walsh, Chairman of Air New Zealand, but added that the storm had not yet cleared.
The extended facility is designed to see the airline through to the completion of its proposed financing, which was originally due for completion by June 30, 2021, but has now been pushed back to September 30 due to “evolving circumstances.”
The New Zealand Government holds a 52 per cent stake in Air New Zealand, and will participate in the financing to maintain its majority interest.
Air New Zealand is up 0.9 per cent to $1.68 per share at 10:45am AEST.
