Origin Pacific boss hopeful bailout plan will get backing

1.00pm

Origin Pacific managing director Robert Inglis is hopeful but not entirely confident that the Nelson-based airline's creditors will accept a deal saving the company from receivership.

The regional carrier, New Zealand's second-biggest airline, owes about $11.8 million to unsecured creditors.

Origin has offered to pay some 50 major creditors 40 cents in the dollar in the next five years in its bid to avoid going bust.

Mr Inglis said the plan was suggested by a group of major creditors, following revelations last week that the airline was in financial difficulty.

For that reason he was hopeful creditors would be in favour of the proposal when they vote on it next Friday.

"We are very hopeful that with their support we will get the necessary numbers. I don't think we could ever be entirely confident."

The Wellington and Christchurch airport companies and Airways New Zealand were among those who suggested the action, Mr Inglis said.

Under the Companies Act, creditors are bound to go along with the plan if over half of them, or a number representing 75 per cent in financial value, support it.

Nelson Airport Ltd this morning urged creditors to back Origin's offer.

Nelson Airport chairman Ian Kearney said the company, which is owed more than $80,000 by Origin, was definitely backing the plan.

The proposal was "well structured", Mr Kearney said.

"We believe that the proposal will enable (Origin) to survive and grow again and we don't think receivership is likely.

"We understand Wellington airport have already said that they will support it and we would hope that other creditors would too."

Wellington International Airport Ltd could not be reached for comment this morning.

Airways New Zealand spokesman Ken Mitchell said the state-owned enterprise, which as the main creditor is owed $1.85 million, was still considering Origin's proposal.

Air New Zealand spokesman Mike Tod this morning confirmed the airline was owed "several hundred thousand" dollars by Origin, mainly for engineering work, but would not comment on whether it was likely to accept the offer.

"We are just working on that."

Mr Tod would not comment on claims from Mr Inglis that the Government's bailout of Air NZ in 2001 had added to Origin's financial difficulties.

Since the $885 million taxpayer-funded rescue of the national carrier, Air New Zealand has introduced a low-cost model, slashing fares and increasing capacity.

Mr Inglis said the "bulk" of creditors were off-shore parties.

He was positive about the airline's future.

"We very strongly believe that there is a future for Origin if we can get past this step."

Mr Inglis and his partner, Nicki Smith, will also pump in $2.5 million of their own money to help pay the bills. Both are Origin's founders and main shareholders.

- NZPA