New shareholders on list of Air NZ rescue ideas

By FRAN O'SULLIVAN assistant editor

Government negotiator Rob Cameron was last night trying to put together a new rescue package for Air New Zealand.

Mr Cameron is canvassing all options - including the possibility of bringing in new shareholders - as airline chiefs keep trying to get a workable bailout deal for the national flag carrier.

Air New Zealand's two major shareholders - Singapore Airlines and Brierley Investments - were asked by the board's independent directors on Friday to confirm their commitments immediately, rather than wait four to five weeks for a due diligence exercise to be finalised.

The shareholders each committed $150 million to the $850 million rescue proposal announced on September 13.

The Government agreed to provide the remaining $550 million as a loan.

But the global aviation industry has since gone into a tailspin because of the terrorist attacks on the US.

Mr Cameron has suggested the Government turn part of its $550 million loan into an equity stake in Air New Zealand.

It is understood Singapore and BIL boards are actively considering the package, which also could see the Government underwrite future capital raising.

The prospect of other new shareholders, such as Qantas, has also been floated.

Air New Zealand's acting chairman, Jim Farmer, QC, said yesterday that "good progress" had been made in talks between the airline, its major shareholders and the Government.

Dr Farmer will reconvene a full board meeting in the next two days to discuss progress on a plan which will give Air NZ enough money to ride out the world aviation downturn.

Talks have also been held with Ansett's administrators to corral its huge debts and prevent the collapsed Australian airline taking down Air New Zealand.

Yesterday, speculation that Air NZ would go into statutory management fuelled a 40 per cent plummet in its share price, taking the A shares - available only to NZ residents - down to 18c and the unrestricted B shares to 15c.

Prime Minister Helen Clark yesterday repeated that statutory management was an option if the two shareholders decided not to put more money into the struggling airline.

But she left open the possibility that an alternative consortium wanting to invest in it would not necessarily have to wait until after a statutory manager was appointed.

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