Air NZ equity raise: Government confirms it will participate to retain stake

The Government will retain its majority stake in Air NZ by participating in a capital raise this year, Finance Minister Grant Robertson says. But Cabinet must be satisfied with the terms of the airline's proposed equity raise - to be completed by June 30 - in order to maintain its stake. At present, the Government owns 52% of the airline and has made available a $900m loan that could be converted to equity. The airline is burning through between $65m and $85m in cash a month and has said it wants to minimise its reliance on the taxpayer loan - with interest rates of up to 9% - by going to the market to raise capital. By the end of last September, the airline had drawn down $110m of the Government loan, a figure that will be updated when the company reports its half-year result at the end of the month. Other airlines have successfully raised funds in the past 10 months to help them survive the Covid-19 crisis. The airline says a letter from Robertson recognised the importance of a strong domestic air travel network for economic and social development purposes. It also recognised the key role of Air NZ in supporting our international tourism and export industries. "The minister also highlighted Air New Zealand's commitment to environmental sustainability, and the airline's role as a good employer," the airline says.<br/>