19 Nov 2013

Government raises $365m from Air NZ sale

10:26 pm on 19 November 2013

The Government has raised $365 million from the sale of 20% of the shares in Air New Zealand for $1.65 each.

State Owned Enterprises Minister Tony Ryall said there was significant demand from New Zealand retail broking firms and institutions, which bought the majority of shares on offer on Tuesday.

Air NZ planes

Photo: RNZ

The Government has been criticised for timing the sale just days before a referendum on its partial asset sales programme. But Finance Minister Bill English said the price paid for the airline's shares confirms that the Government made the right decision.

Trading in the shares was suspended on Monday and Tuesday and the price and revenue for the Government raised is about what was expected.

Mr Ryall said the sale had been a success. "The final price of $1.65 is the same price that the company's shares closed on Friday, and this makes our selldown of Air New Zealand shares probably one of the most successful of these types of share selldowns in recent times."

One of the Government's aims was to keep 85% of the airline in New Zealand ownership.

Bill English said he is confident that once the shares are on-sold by brokers, he expected that 88% of the national carrier would be owned by New Zealanders as of Wednesday, including the Government's 53% shareholding.

He said the Government has now earned a total of nearly $4 billion from its partial share sales of Air New Zealand, Mighty River Power and Meridian Energy. It expects to sell shares in Genesis Energy in early 2014.

Meanwhile, Mr English denied that Prime Minister John Key misled the public when he said last Thursday that no immediate sale of Air New Zealand shares was planned. The Government announced the sale on Sunday.

Labour leader David Cunliffe said on Tuesday that Mr Key must have known that the sale process was just about to begin.

But Mr English told MPs the final decision was not made until Friday - the day after the Prime Minister's comments - and that Mr Cunliffe's allegations were simply wrong.