In a nutshell

Friday 29th June 2001

Aviation politics dog Air New Zealand

The future of Air New Zealand remained unclear as the airline briefed governments on both sides of the Tasman. Air NZ wants Singapore Airlines (SIA) to be allowed to lift its 25% stake but Finance Minister Michael Cullen said the government would find it "very, very difficult" to approve that.

The issue has become a political football, with opposition leader Jenny Shipley suggesting the government's Alliance junior partner opposes SIA and offering National's support for a bigger SIA stake.

Meanwhile, Qantas tried to gain support for its plan by offering to buy out SIA and 30% holder Brierley Investments and onsell BIL's shares.

Nuts'n'cola for creditors

The secured and preferential creditors of Qantas New Zealand will be paid in full but others owed $64 million face a 4c-in-the-dollar payout. Legal action could eventually swell the amount available to unsecured creditors but receiver Ferrier Hodgson made no mention of that prospect in its report.

Some creditors are considering action against past and present directors of Qantas NZ parent Tasman Pacific.

Tranz Rail stock sale

Tranz Rail began its journey toward "virtual company" status with a plan to sell most of its long-distance passenger services to Australia's West Coast Railway. Terms are still being negotiated and no price has been settled. The remaining services are uneconomic and will be closed down.
Page 10

Govt mulls cybertax

The government is considering levying GST on services imported electronically to level the field for New Zealand suppliers. Finance Minister Michael Cullen said the proposal would mostly affect financial services firms which would see costs increase.

A discussion document is available at www.taxpolicy.ird.govt.nz.

Rain no cure for NGC pain

Rainfall brought little relief from the power price hike squeezing Natural Gas Corporation and its parent, AGL. NGC, estimated to be losing millions of dollars a day after being caught unhedged, is negotiating to offload 116,000 Christchurch customers to generator Meridian Energy.

AGL has had to extend to NGC a $100 million short-term loan and rating agency Moody's put the Australian operator on creditwatch negative.

Air New Zealand's confused flight path

"Plan B? I don't know that there is one" - chairman Jim Farmer, June 20

"If the SIA proposal was not to succeed, of course the alternative would be the sale of Ansett to SIA" - CEO Gary Toomey, June 24

"While it might be a short-term easy fix to sell Ansett we believe in the medium term it would have the opposite effect" - Mr Toomey, June 27

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