Forum Archive Index - December 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

I have been catching up on the Air New Zealand reconstruction 
proposal.

>From page 34
"A pro rata rights issue underwritten by the Crown would have 
arguably been a better option for minority shareholders in Air New 
Zealand, enabling all parties to the proposed recapitalisation to 
acquire shares at a substantially discounted price.  The crown has 
indicated that it intends to be a long term shareholder in Air New 
Zealand.  An underwritten cash issue would not have guaranteed this 
outcome."

Something doesn't add up to me in this logic.  We know that Air New 
Zealand needs recapitalisation.  But why is the private sector money 
not as good as the governments?  Why is the government *insisting* on 
control?  And what percentage shareholding do they need for control?

You could argue that Singapore Airlines had control of Air New 
Zealand with only 25% of the shares, for example.  

>From page 30
"the proposed recapitalisation requires 75% of the votes cast on 
certain resolutions at the meeting of Air New Zealand Shareholders to 
be in favour of these resolutions."

I see the figure of 75% is mentioned above.

The proposed recapitalisation will ensure that the government gets 
over 75% of the shares.  I know 50.1% means control, so what is the 
additional benefit offered if the controlling shareholder owns over 
75%?  Anyone know?

>From p40
"The crown has already invested $300 million in Air New Zealand 
through the loan provided on 15 October 2001.  In Grant Samuel's 
opinion if the proposed recapitalisation does not proceed, the crown 
would be most unlikely to recover any of this loan, as it ranks 
behind a substantial amount of secured and unsecured debt."

Is this part of it?   Are the board worried they will lose the $300m 
if they don't 'control' Air New Zealand?   

Or is there some secret agreement with the banks that unless the 
government 'controls' Air New Zealand they will pull the plug?

SNOOPY

P.S. Oh and one more thing.   To those 'A' shareholders who wish to 
have their view on the future composition of the board.   Sir Ron 
Carter and Ralph Norris were part of the board that approved the 
purchase of Ansett without due diligence.   I would strongly suggest 
that any 'A' shareholders turning up at the annual general meeting 
vote *against* these two men!  




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Message posted by Harry Tennyson
 using Pegasus Mail 2.55
I have Word 97 to read attachments
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