LONDON – The New Zealand Government has increased the loan issued to Air New Zealand by another NZ$600m, bringing the total to NZ$1.5bn.
This is due to the carrier deferring plans to tap its shareholders for additional funding until September 2021. Air New Zealand stated it needed more time to look at the developments arising with the vaccine roll-out, expansion of the airfreight capacity scheme as well as the trans-Tasman announcements too.
Commenting on this was Air New Zealand chair Therese Walsh who stated this was a fundamental move for the carrier:
“These developments are good news and fundamental to Air New Zealand’s return to success, but the storm hasn’t cleared yet,”
“All amounts outstanding under the loan will be repaid from the proceeds of the proposed capital raise.”
“The Board expects the final capital raise structure to be a mix of debt and equity,”
The carrier has only used around NZ$350m of the loan so far, and hasn’t used more of it since February, so the carrier still has a safety cushion of NZ$1.2bn left to use.
Whilst they haven’t been used yet, it doesn’t mean that it won’t be needed in the future. With COVID restrictions still tight in that area of the world, it means that there aren’t that many opportunities to make revenues as of yet.
It will be interesting to see how Air NZ gets out of this crisis, and whether it will need any further extensions going forward.