KEY POINTS:
Air New Zealand shareholders are to vote on the company's previously announced plans to buy new aircraft worth up to $4.5 billion.
The planned Boeing aircraft acquisitions are to be put to a special resolution which needs to be passed by at least 75 per cent of shareholder votes, at the annual shareholder meeting on September 28.
The Crown, which holds 76.5 per cent of Air NZ shares, had indicated its intention to vote in favour of the resolution, Air NZ said in notes for the shareholder meeting.
Shareholders who cast all their votes against the resolution, assuming it was passed, would be entitled to require the company to buy their Air NZ shares for a fair and reasonable price.
The aircraft involved are six Boeing B789s and four Boeing B773ERs already bought by the airline, the first of which are due for delivery in late-2010.
Also covered are a further eight B789s and three B773ERs for which Air NZ has option rights.
In the notes for the meeting, Air NZ said that based on future long-haul fleet requirements, it expected to exercise some or all of the option rights.
Aircraft costs included in the meeting notes, putting the total for the purchased and option aircraft at $4.5b, were current list prices.
They did not include a "confidential, substantial discount" negotiated in 2004, during a period of reduced global demand for new aircraft.
Those prices were "excellent" and would not be able to be achieved in the current market, Air NZ said.
"Because of the scarcity of production slots for these aircraft types which are in high demand, there is substantial value for the company in being able to confirm orders and production slots which meet the company's needs, potentially on short notice, subject to board approval in each case."
Air NZ said it intended to grow long-haul markets with flight frequency and alternative destinations rather than aircraft size.
To achieve that, it needed a flexible fleet of aircraft capable of serving a range of markets.
While the B789 would meet the vast majority of the company's needs, a larger aircraft was needed for high traffic routes into and out of slot-restricted airports such as London Heathrow, where Air NZ was likely to remain constrained to double daily services.
The B773ER aircraft already bought would allow operation of a single daily service to London with aircraft maintenance cover, Air NZ said.
Buying the B773ERs on option would enable the double daily London service to be operated exclusively by B773ER aircraft.
Air NZ must put the acquisitions to a special resolution as the Companies Act requires such action in cases where a company acquires assets with a value of more than half its assets.
For the purpose of that test, the value of a company's assets were calculated on a company only basis, excluding assets of subsidiary companies, Air NZ said.
As at June 30, Air NZ's parent company only assets had a value of $3.5 billion, while the group's consolidated assets were $4.9 billion.
While shareholder approval was not needed for those aircraft already bought, when Air NZ wanted to exercise any or all option rights it was possible the asset value threshold would be crossed.
The special resolution also deals with a stock exchange rule requiring shareholder approval for any transaction or series of linked or related transactions where a company acquires assets with a gross value of more than 50 per cent of the company's average market caplitalisation.
- NZPA
