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New Zealand Raises NZ$365 Million From Air N.Z. Share Sale

Nov. 19 (Bloomberg) -- New Zealand’s government raised NZ$365 million ($304 million) from the sale of shares in Air New Zealand Ltd., completing the third of four planned asset sales before next year’s election.

The government sold 221 million shares at NZ$1.65 apiece, reducing its stake in the national carrier to 53 percent from 73 percent, Finance Minister Bill English said in a statement. Air New Zealand shares, halted yesterday and today, last traded on Nov. 15 at NZ$1.65.

Prime Minister John Key has now raised NZ$3.93 billion from asset sales in a program to fund infrastructure and reduce debt. The government has sold 49 percent stakes in Mighty River Power Ltd. and Meridian Energy Ltd. this year, and has slated an offering of Genesis Energy Ltd. shares for next year.

The government is “very happy with the price that’s been achieved” for Air New Zealand and sees no reason to change its plans for the partial Genesis selldown, English said at a press conference in Wellington.

He said earlier this month the government is reviewing its original forecast that its asset-sales program would raise at least NZ$5 billion, after troubled Solid Energy New Zealand Ltd. was taken out of the program and Meridian raised less than expected.

The Air New Zealand transaction has been completed before a non-binding referendum on the divestments opens on Nov. 22. The general election will be held toward the end of next year.

Bookbuild

Brokers and institutions were offered the Air New Zealand shares in a bookbuild that began yesterday and concluded earlier today. Craigs Investment Partners Ltd., Deutsche Bank AG and Goldman Sachs Group Inc. managed the sale. Brokers will now onsell the shares to New Zealand investors.

English said domestic retail investors purchased about 41 percent of the shares on offer, with 43 percent going to local institutions and 16 percent allocated to institutions offshore.

Air New Zealand shares, halted for the Crown’s selldown, have gained 27 percent so far this year. They reached a 5 1/2 year high of NZ$1.69 late last month.

“When the company’s shares resume trading tomorrow we expect approximately 88 percent of Air New Zealand will be owned by New Zealanders,” English said.

Air New Zealand Chief Executive Officer Christopher Luxon said in an interview last month that the airline plans to double passenger and revenue growth in the next few years as it expands in the Pacific Rim region and earns more from established markets such as the U.S.

Revenue growth should reach 5 percent in the 2015 fiscal year, up from 3 percent in the year through June 2013, and the airline is planning for growth rates of as much as 7 percent over the next five years, he said.

The New Zealand government was forced to renationalize Air New Zealand in 2001 after Australian airline Ansett Holding Ltd. went bankrupt less than two years after Air New Zealand took full control of it.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Matthew Brockett at mbrockett1@bloomberg.net

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