BIL sells $100m Air NZ stake

By PAUL PANCKHURST

Fifteen years after buying into Air New Zealand, Singapore's BIL International - formerly Brierley Investments - is exiting with the sale of a 7.8 per cent stake likely to be worth more than $100 million.

Investment bank Goldman Sachs JBWere is today completing a 24-hour "bookbuild" of buyers of chunks of the stake.

It is also offering stock to retail clients who are "habitual" - that is, sophisticated - investors.

Air New Zealand is in a one-day trading halt.

The initial reaction from sharebrokers is surprise at the timing - Air New Zealand's shares closed yesterday at 49c, compared with a high of 64c last September.

"People have been waiting for a sell-down," said one market-watcher.

"We were surprised they didn't take the opportunity when the stock was really hot."

At market price BIL's stake is worth $112 million but sell-offs by bookbuild can be at a discount of 10 per cent to market.

One piece of speculation put BIL's "floor" at 42c a share but no comment was available from the company or Goldman Sachs.

An immediate effect will be to add liquidity to the share and boost its weighting in sharemarket indices.

The Government holds a 74 per cent stake in Air New Zealand, Singapore Airlines has 6.5 per cent, and nearly 12 per cent is held by institutional and retail investors.

The Government's stake swells to 82 per cent when convertible preference shares are factored in.

BIL was an original investor in Air New Zealand when the state asset was sold by a Labour Government in December 1988.

It has been a turbulent trip. The consortium, which included Qantas, American Airlines and Japan Airlines, paid $660 million, or $2.35 a share.

BIL was the biggest investor, with a 65 per cent stake, selling down some of the shareholding to the public and staff in 1989.

Later, BIL owned 47 per cent of the airline, but in 2000 sold a 17 per cent stake to Singapore Airlines.

It was in 2000 that Air New Zealand bought the half of Ansett Australia that it did not already own - the move that led to its near demise and a Government bailout. Lying ahead for the airline is the prospect of a $200 million capital raising.

Selling out severs one of the last ties of BIL International - the company founded by corporate legend Sir Ron Brierley - with New Zealand.

The company moved its registration to Bermuda and its head office and main stock exchange listing to Singapore in January 2000.