Forum Archive Index - June 2001

["Adrian & Vanessa" <vjm@ak.planet.gen.nz>]

Snoopy,

 

In regard to the matter of the Government coming in as underwriter for the issue of new A shares,  I am unable to see why they would do that.  The only reasons I can see relate to national pride and economic sovereignty.

Reasons against such a bail out of the interests of existing shareholders include that the taxpayer/Government  does have an existing loss exposure to the shares going into freefall.  Such a bailout could be characterised as using public funds to benefit private interests.   Underwriting an issue of A shares could well result in the Government buying very large numbers of shares given the rights issue last year and the prevailing negative sentiment to AIRVA shares.   Additionally there would be an impact on the public debt borrowing requirement.

I just don't think it fly. ( like a grounded Ansett Australia plane??)