Air NZ sells Virgin stake to China's Nanshan

Air NZ has sold a 19.98% stake in Virgin Australia to Chinese company Nanshan Group, which owns Qingdao Airlines, and said it's considering options for its remaining 6% holding in Australia's second-largest domestic airline. The carrier said it will sell the stake in Virgin Australia at 33 Australian cents per share, a premium to Virgin's last traded price on the ASX of 28 Australian cents. Last month, Virgin Australia issued new shares at 30 Australian cents apiece to a unit of HNA Aviation Group, the largest private operator of airlines in China, giving it a 13% stake, and HNA said it intends to increase its shareholding over time to 19.99%. Air NZ announced in March that it was considering selling its stake in Virgin Australia and had hired First NZ Capital and Credit Suisse to advise on its options. The Kiwi carrier has spent an estimated A$373m building up and maintaining the Virgin stake since 2011 but faces a considerable loss on that investment. Virgin's share price dropped early this month after brokerage Credit Suisse indicated it could require an A$1b equity raising, double previous expectations, to reduce debt to reasonable levels after it posted a profit warning.<br/>