Post by corsair67 on Sept 13, 2007 15:53:20 GMT 12
I still remember the day Air New Zealand was publically listed for the first time.
Crown may own Air NZ
By ROELAND van den BERGH - The Dominion Post | Thursday, 13 September 2007
The Government may end up owning a lot more of Air New Zealand if minority shareholders vote against a resolution to spend up to US$4.5 billion (NZ$6.4 billion) on new aircraft.
Shareholders will vote on the resolution at the annual meeting in Wellington on September 28, with 75 per cent support required.
The Government has already indicated that it will use its 76.5 per cent holding to vote in favour of the proposal, meaning it will pass.
However, any shareholders who vote against the resolution will be entitled to force the airline to buy back their shares "for a fair and reasonable price".
Under the Companies Act, Air New Zealand will be required to acquire an independent valuation for the shares. If Air New Zealand buys back any shares, the Government's stake will increase as a result, with no cost to the taxpayer.
It is understood that at least one sizeable shareholder will vote against the resolution and force a buyback.
One leading analyst said institutional investors would be expected to vote against the resolution to give them the option of locking in a potentially higher independent valuation. Mum and dad investors should also take advantage of the opportunity, the analyst said.
Sharebrokers and the airline were bullish about Air New Zealand's prospects. A new, more efficient fleet would weigh in favour of a higher independent valuation than yesterday's closing price of $2.22, up 4c.
First NZ Capital has forecast a price of $2.75 a share.
In the short term shareholders can benefit with Air New Zealand's share price expected to come under pressure from increased competition from Pacific Blue, which starts flying domestically in November.
But, in the longer term, Air New Zealand's share price can be expected to rise.
Potentially, the Government's holding may even exceed the 90 per cent threshold where it can compulsorily acquire the entire company.
However, it is unlikely enough shareholders will sell for that to happen and the Government can request a waiver from the requirement from the stock exchange.
The Government bailed out Air New Zealand in 2001 for $1.1 billion, giving it a holding of about 80 per cent at the time.
Air New Zealand has ordered six of the next generation Boeing 787-9 Dreamliner jets and four Boeing 777-300ER long-range aircraft to replace its Boeing 747-400 fleet from 2010.
The new jets are worth US$2.2 billion at list prices.
But Air New Zealand also has options to purchase another eight B787-9s and three B777-300ERs, worth another US$2.3 billion at current prices.
The need for 75 per cent approval of the purchase is because the purchase price of the new aircraft already committed to, plus options for more, potentially exceeds more than half Air New Zealand's average market capitalisation.
In the notes for the annual meeting, Air New Zealand said that it expected to exercise some or all of the option rights.
As a result the deal would require shareholder approval.
Crown may own Air NZ
By ROELAND van den BERGH - The Dominion Post | Thursday, 13 September 2007
The Government may end up owning a lot more of Air New Zealand if minority shareholders vote against a resolution to spend up to US$4.5 billion (NZ$6.4 billion) on new aircraft.
Shareholders will vote on the resolution at the annual meeting in Wellington on September 28, with 75 per cent support required.
The Government has already indicated that it will use its 76.5 per cent holding to vote in favour of the proposal, meaning it will pass.
However, any shareholders who vote against the resolution will be entitled to force the airline to buy back their shares "for a fair and reasonable price".
Under the Companies Act, Air New Zealand will be required to acquire an independent valuation for the shares. If Air New Zealand buys back any shares, the Government's stake will increase as a result, with no cost to the taxpayer.
It is understood that at least one sizeable shareholder will vote against the resolution and force a buyback.
One leading analyst said institutional investors would be expected to vote against the resolution to give them the option of locking in a potentially higher independent valuation. Mum and dad investors should also take advantage of the opportunity, the analyst said.
Sharebrokers and the airline were bullish about Air New Zealand's prospects. A new, more efficient fleet would weigh in favour of a higher independent valuation than yesterday's closing price of $2.22, up 4c.
First NZ Capital has forecast a price of $2.75 a share.
In the short term shareholders can benefit with Air New Zealand's share price expected to come under pressure from increased competition from Pacific Blue, which starts flying domestically in November.
But, in the longer term, Air New Zealand's share price can be expected to rise.
Potentially, the Government's holding may even exceed the 90 per cent threshold where it can compulsorily acquire the entire company.
However, it is unlikely enough shareholders will sell for that to happen and the Government can request a waiver from the requirement from the stock exchange.
The Government bailed out Air New Zealand in 2001 for $1.1 billion, giving it a holding of about 80 per cent at the time.
Air New Zealand has ordered six of the next generation Boeing 787-9 Dreamliner jets and four Boeing 777-300ER long-range aircraft to replace its Boeing 747-400 fleet from 2010.
The new jets are worth US$2.2 billion at list prices.
But Air New Zealand also has options to purchase another eight B787-9s and three B777-300ERs, worth another US$2.3 billion at current prices.
The need for 75 per cent approval of the purchase is because the purchase price of the new aircraft already committed to, plus options for more, potentially exceeds more than half Air New Zealand's average market capitalisation.
In the notes for the annual meeting, Air New Zealand said that it expected to exercise some or all of the option rights.
As a result the deal would require shareholder approval.
