Government gets $15.4m payout from Air NZ

Other shareholders have not had a dividend from Air New Zealand since the Ansett Australia collapse in September 2001, but the Government yesterday collected $15.4 million from its 1.3 billion convertible preference shares.

The shares will convert into 255,973,288 ordinary shares on January 31 and a further dividend of $547,011.41 will be paid to the Crown on that date for the 13 days from January 18 to January 31.

Air NZ has 744 million ordinary shares on issue.

The convertibles are earning a 5 per cent return - but ordinary shares have not been paying dividends. The Government will own 80.5 per cent of the company when the shares convert at the end of the month.

When the Government bailed out the failing airline in 2001, it made a $300 million loan in exchange for the convertible preference shares.

Air New Zealand says it will resume dividend payments this year.

It plans to pay out between 25 per cent and 30 per cent of after-tax profits as dividends.

As well as lending Air NZ $300 million, the Government initially invested a further $585 million by subscribing for new ordinary shares.

Last year it added a further $150 million, when it took part in a $185.5 million rights issue, used to raise capital to help pay for a fleet of new long-haul jets.

Australian national carrier Qantas has "redeemable convertible notes" that would convert into a 4.2 per cent stake in Air New Zealand.

It bought the notes for $98 million in December 2002.

Qantas did not take part in last year's rights issue. The airlines' alliance plan was rejected by New Zealand authorities last year.

The pair are still waiting for the full decision of the Australian Competition Tribunal, which last year approved the plan.