Singapore flies off with stake in Air NZ

By JOHN DRAPER deputy Business Herald editor

After one aborted takeoff, Singapore Airlines is about to add Air New Zealand to its global network.

Singapore Airlines yesterday reached agreement with Brierley Investments to acquire 16.7 per cent of its stake in the New Zealand flag carrier for $285 million.

And it will look to increase its stake further if it can gain Government clearance.

The deal is conditional on Air New Zealand's acquiring the 50 per cent of Ansett Australia it does not already own, and regulatory approvals. The latter appears a formality, with the Government last week giving its nod, as Kiwi shareholder, to Singapore's lifting its stake in the airline to 25 per cent.

Singapore Airlines deputy chairman and chief executive Dr Cheong Choong Kong said last night that the stake would cement the commercial relationship that already existed between the three airlines.

Singapore expects to get at least two seats on the 10-member board, although it may also get the deputy chairman position. It will be the second largest shareholder after Brierley Investments, which will retain 30 per cent of the A shares.

Only New Zealanders can hold A shares, while foreigners can hold the B shares.

"This is not a takeover or merger with Air New Zealand or Ansett Australia. Our participation at board level is to create growth opportunities," Dr Cheong said.

The agreement knocks aside Qantas' ambitions to become Air New Zealand's largest shareholder and ties Air New Zealand into Singapore's global network with Virgin Atlantic and the Star Alliance.

Earlier this month, Singapore made a lightning sharemarket stand to acquire 8.3 per cent of the B shares at $3, the same as BIL will get for its shares.