Air New Zealand Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery.

"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," says Air New Zealand Chairman Dame Therese Walsh.

"These developments are good news and fundamental to Air New Zealand’s return to success, but the storm hasn't cleared yet. We have suspended our cash burn guidance while we take the time to see how these events might impact our outlook."

Air New Zealand is now targeting its equity capital raise to be undertaken by 30 September 2021 to give the airline time to assess market conditions.

The Government has also agreed to extend and renegotiate the loan facility, so Air New Zealand has sufficient liquidity to take the airline through to the capital raise.

The loan facility will be increased by up to $600 million in additional liquidity, bringing the total facility to $1.5 billion. The facility term has also been extended through to September 2023 and the interest rate will be adjusted to reflect current market conditions.

The airline continues to focus on managing its level of cash burn, and there have been no further drawdowns on the Crown facility since interim results, therefore current drawdowns on the facility remain at $350 million.

Dame Therese commented that both the Crown loan and capital raise are vital to ensure Air New Zealand is set up well for the future, continuing to play its key role in connecting New Zealanders with their friends and whānau, and keeping business links open here and around the world.

"All amounts outstanding under the loan will be repaid from the proceeds of the proposed capital raise. The Board expects the final capital raise structure to be a mix of debt and equity.

"There’s a huge amount of optimism in the airline as we look forward to trans-Tasman travel starting. After a few months of operating internationally again we expect to have a clearer view of the recovery path for the airline and the long-term capital structure to suit our future business."

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