as reported in Today's "Age" and "SMH". It looks like SQ is very reluctant to be the saviour for AN/NZ. You have to wonder for how long can NZ control 100% of AN.
Air NZ in plea for big bailout
By GEOFFREY THOMAS
Tuesday 15 May 2001
Air New Zealand and Ansett are seeking an unprecedented $NZ700 million ($A567 million)
bailout from the New Zealand Government to revamp their aircraft fleet, as funding options
with 25 per cent equity partner Singapore Airlines dry up.
Singapore Airlines, apparently frustrated at board level with Air NZ and stymied by the New
Zealand Government's refusal to lift ownership caps, walked away from Air New
Zealand/Ansett's worsening fleet problems last month.
And fleet refurbishment plans
have been put back again.
Analysts in Wellington
claimed yesterday that an Air
NZ proposal relating to
financing the estimated $A5
billion fleet replacement
program, due to be presented
to the airline's board in July,
had been put back until
August or September.
That delay has prompted Air
NZ/Ansett president Gary
Toomey to cancel a trip to
Hong Kong to attend Credit
conference, where he was
expected to present Air New
Zealand's case for funding.
Global equity analysts
Salomon Smith Barney has
been engaged to examine
funding options and advise the airline.
But the problems with the group were deeper, said analysts in Singapore, who claimed that
the relationship between Singapore Airlines' chief executive Cheong Choong Kong and Air
New Zealand's Sir Selwyn Cushing was strained at best.
The Singapore Airline's board is still miffed that its attempts in 1999 to buy directly into
Ansett were thwarted by Air NZ, led by Sir Selwyn.
"The relationship has never recovered from that spat. Dr Cheong lost face over that deal and
he is not going to bail Sir Selwyn out," said one analyst. "Our understanding is that
Singapore Airlines wants to see Sir Selwyn retire from the board of Air New Zealand."
The New Zealand Government is making it extremely difficult for Singapore Airlines to help
out by capping its ownership level at 25 per cent.
Compounding that problem, the airline groups' largest shareholder, Brierley Investments Ltd,
with 30 per cent, would be struggling to raise significant capital, said analysts in Singapore.
"Besides, BIL wants to exit the airline," said one analyst.
BIL chief executive Greg Terry has confirmed that desire to exit Air NZ but said that the exit
would be made at the appropriate time and at the right price - at least double the current price
Under the proposed bail-out, Air NZ wants the government to inject capital through issuing
crown capital notes. The amount would be $NZ350 million in each of the next two years.
The government has confirmed Air NZ had requested a meeting.