NZ Govt/Singapore Airlines/Air NZ -4: Needs Fresh Equity
(MORE) Dow Jones Newswires 15-06-01
Govt Agrees To Meet
WELLINGTON (Dow Jones)--Singapore Airlines (Singapore: SIAL.SI - news) (P.SAL) has sought a meeting with the New Zealand government to discuss Air New Zealand (A.AIZ) ownership issues, a spokeswoman for Finance Minister Michael Cullen said Friday.
The government has agreed to the meeting although the date still has to be set, the spokeswoman told Dow Jones Newswires.
The meeting will be with Air New Zealand's "shareholding ministers," who are Cullen and Transport Minister Mark Gosche, she added.
(MORE) Dow Jones Newswires 15-06-01
0308GMT May Also Meet PM
"A meeting has been sought and yes, he (Cullen) will meet them but that's all I can tell you. I don't even know if a time has been set down," the spokeswoman said.
Singapore's Straits Times Friday reported that Singapore Airlines is leaning toward retaining or increasing its 25% stake in Air New Zealand and buying part of the carrier's Ansett Australia unit instead of participating in Qantas Airways' takeover proposal.
"The Qantas proposal is not SIA's preferred option," SIA Deputy Chairman Cheong Choong Kong said, according to the report.
Under the Qantas transaction, the Australian carrier would acquire up to 49% of Air New Zealand by buying Singapore Airline's stake and Brierley Investment's (A.BRY) 30% stake.
Once in control, Qantas would sell Ansett Australia to Singapore Airlines.
The Qantas proposal has met with stiff opposition from local lawmakers who are concerned that a takeover of Air New Zealand would jeopardize the airline's international landing rights, hurt tourism promotion, and stifle competition.
Singapore Airlines, however, could face similar opposition to Qantas because under current ownership rules, 25% is the maximum interest a foreign airline can have in Air New Zealand.
A spokesman for Prime Minister Helen Clark said Singapore Airlines had also requested a meeting with Clark next week but she is yet to respond.
(MORE) DOW JONES NEWS 06-14-01
11:46 PM Needs Fresh Equity
Singapore Airlines has also requested a meeting with Deputy Prime Minister and Alliance Party leader Jim Anderton.
The Alliance is the junior partner in New Zealand's center-left minority coalition government.
A well placed Alliance Party source told Dow Jones Newswires there is a view in the Alliance Party that the best outcome for Air New Zealand would be if Singapore Airlines bought loss-making Ansett Australia.
The meeting between Anderton and Singapore Airlines is expected to take place next week, the source added.
Air New Zealand's board is meeting Monday and Tuesday, but the company is declining to reveal the meeting's agenda.
The airline's future ownership structure is currently the subject of intense speculation amid uncertainty about how it will fund a NZ$5 billion fleet upgrade and expectations the carrier will report a loss for the year to June of about NZ$170 million. Restrictions on foreign ownership of the airline are constraining its ability to raise much-needed new equity.
Around 0428 GMT, shares of Qantas were up 5 cents, or 1.6%, at A$3.26, Air New Zealand's resident-only A shares were up 5 cents, or 4.6%, at NZ$1.15, and shares of Singapore Airlines were down 30 Singapore cents, or 2.3%, at S$12.60.
SIA cool to Qantas' proposal on Air NZ
Singapore Airlines has grown 'quite attached' to Air New Zealand and is unwilling to give up its stake
By Nicholas Fang
SINGAPORE Airlines' (SIA's) chief executive yesterday gave the cold shoulder to Qantas' bid to muscle in on its quarter-owned Air New Zealand (Air NZ), after a meeting in Sydney yesterday to discuss what was on the table.
One option could be for SIA to buy into Ansett and keep or raise its Air NZ stake, says Dr Cheong.
In the strongest indication so far of SIA's stance on the move by its Australian rival to create a mega Asia-Pacific airline, Dr Cheong Choong Kong, who is also SIA's deputy chairman, said yesterday: 'The Qantas proposal is not SIA's preferred option.'
Dr Cheong, who was speaking to reporters in Singapore after returning from Sydney, said there were other options open to SIA.
Qantas wants to buy up to 49 per cent of Air NZ by buying all, or part of SIA's 25 per cent stake and Singapore-based Brierley Investment's 30 per cent holding.
In return, Air NZ would sell SIA its struggling unit, Ansett - which trails behind Qantas as Australia's No 2 airline.
The SIA chief said that while the national carrier was willing to help Ansett - which needs cash to upgrade its fleet - 'we would have to be persuaded why we should give up our stake in Air NZ'.
SIA had become 'quite attached' to Air NZ after working with them for many months, he said.
He disclosed that one option could be for his airline to take a stake in Ansett and still keep its Air NZ stake, possibly raising this above the 25 per cent limit to which it is now restricted, if the Kiwi government gave the green light.
When asked how big a stake in Ansett would be attractive, he indicated that it would have to be substantial.
'Ansett needs capital and the balance sheet of Air NZ does not allow it to help,' he said.
'If we have only a small stake in Ansett, Air NZ would still have to put up its share of the capital and it does not have the resources to do that.'
He emphasised that this was just another option, and not a proposal.
The meeting in Sydney involved an independent committee set up by the Air NZ board and Qantas executives. SIA was there as a shareholder of the Kiwi carrier.
Dr Cheong also said yesterday that the rumours of SIA 'egging' on Qantas in its bid were untrue, although this would allow it to achieve its long-held aim of owning Ansett.
SIA has been seeking a foothold in the lucrative Australian domestic market for some time and tried but failed to acquire a 50 per cent stake in Ansett in 1999.
Given the latest developments, Dr Cheong said that SIA would be 'making appointments as soon as possible' to speak to the New Zealand government about the proposed deal.
The Kiwi government indicated two weeks ago that it was against foreign companies holding a controlling stake Air NZ as this might affect landing rights and New Zealand tourism.
When asked if he felt the deal would be resolved soon, Dr Cheong said: 'We do not have all the time in the world.'
'The Air NZ group and Ansett, in particular, are facing serious problems. We must identify all possible alternatives and make decisions quickly.'
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