Air New Zealand announced on Friday (13 August) that it has deferred its plans to raise additional capital until 2022, after the government said it was unable to support the equity raise in the current economic environment. The flag carrier had initially planned to tap shareholders for a cash injection in June but deferred that to September.
In a letter to Air New Zealand Chair Therese Walsh, Minister of Finance Grant Robertson withdrew the government’s support of the September capital raise. “My view is that the current environment is not sufficiently certain and stable to enable the Crown to make a decision on providing a firm pre-commitment to support the planned equity raise, as the company has indicated is required to meet that planned timing,” he said, according to media reports. “These deferrals have not affected the Crown’s commitment to Air New Zealand to participate in an equity capital raise, as demonstrated by the letters of support I provided on 12 February 2021 and 8 April 2021.”
Air New Zealand planned to use part of the proceeds to pay back amounts drawn down from its NZ$1.5 billion debt facility from the government. The finance minister did agree to cancel a planned interest rate hike to the loan which was due to come into the effect at the end of October. So far, Air New Zealand had used NZ$350 million of the loan but planned to draw down further on the remaining NZ$1.15 billion following the suspension of trans-Tasman travel earlier this month and upcoming payments relating to its aircraft.
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