Govt selling down Air NZ shares

Speculation that the government was going to sell down some of its shareholding in Air New Zealand soon was confirmed yesterday.

The Government has today started the process to sell 20 per cent of Air New Zealand shares, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.

“A sale of shares to New Zealand brokers and to New Zealand and some offshore institutions will commence tomorrow, Monday 18 November, via a bookbuild process,” Mr English says. “We expect the transaction to be completed by Tuesday evening.

“New Zealanders will be at the front of the queue for shares and we are confident we will achieve the Government’s objective of at least 85 per cent New Zealand ownership.

“Air New Zealand is different from the other companies in the Government share offers programme in that it is already listed on the New Zealand and Australian sharemarkets. This means a different process will be used to reduce the Government’s shareholding.

“The Treasury sought proposals from its panel of financial advisers to carry out an off-market sell down via a bookbuild.  Craigs Investment Partners, together with Deutsche Bank and Goldman Sachs, have been appointed to undertake the transaction and work with New Zealand sharebrokers in particular to target widespread New Zealand ownership.

“Shares will be sold via a competitive bookbuild process to New Zealand sharebrokers for on-sale to New Zealanders, and to New Zealand and some overseas institutional investors.

“Shareholding sell downs of this type are typically conducted off-market when the company’s shares are not trading on a stock exchange, to ensure the company’s share price is not affected by speculative trading,” Mr English says.

“An off-market sell down is fast and efficient, which is important when working with a company that is already listed.

“Usually these types of sales are completed in less than one day. However, to target widespread New Zealand ownership, we are conducting the bookbuild over Monday and Tuesday to give New Zealand sharebrokers time to discuss the offer with retail investors.

“That is why the sell down process is being started today and we anticipate there will be a trading halt of Air New Zealand shares on the NZX and ASX when the markets open tomorrow.

“We expect Air New Zealand’s shares to resume trading on the NZX and ASX on Wednesday,” Mr English says.

Mr Ryall says Air New Zealand is currently trading at five-year highs, making it an opportune time to conduct the sell down.

“Air New Zealand is one of our most iconic global brands and has regularly been recognised on the world stage as a leading international airline. Its share price has been performing strongly.

“New Zealanders interested in purchasing Air New Zealand shares should talk to a sharebroker or authorised financial adviser.

“The Crown currently owns 73 per cent of Air New Zealand. Therefore, the sale of 20 per cent of Air New Zealand shares will leave the Government with a shareholding of around 53 per cent of the airline.

“There have been several successful similar off-market sell downs in recent times, involving other existing NZX listed companies such as Auckland Airport, Trade Me, Summerset and Sky TV.

“This sale approach will keep down transaction costs for taxpayers, maximising the proceeds that we can invest in other public assets like hospitals and schools.

“The Government’s share offer programme has raised $3.6 billion from the first two share offers.

“The proceeds of the programme have been allocated to the Future Investment Fund so the money can be reinvested in new assets and new infrastructure without the need to borrow money from overseas lenders,” Mr Ryall says.

Air New Zealand was listed with other SOEs National said it would partially float if it won the last election.

The sale of a few shares is simple because the company is already listed on the share market.

Ministers have been asked about the possible sale recently. They couldn’t confirm it before the announcement without breaching stock exchange rules.

The decision is already being criticised because the sell-down will take place before the upcoming referendum on the partial sale of a few state assets.

That criticism is just political posturing.

National was explicit about its intention to partially float some SOEs and the Opposition said the election would be a referendum on the issue.

They lost and the referendum is nothing but an expensive publicity exercise for them.

There’s no need to wait for the results. They’re non-binding and the government has made it quite clear it will ignore them, as it has the right to do.

43 Responses to Govt selling down Air NZ shares

  1. robertguyton says:

    Gordon Campbell cuts through the cover for National’s blatant theft-by-asset-sale – It is exactly like being robbed, and then sworn to silence by the robber – indeed.

    “As in other citizens initiated referenda (CIR), the result will not be binding on the government. It does however, give us an opportunity to tell the government (and each other) what we think of a process that has steadily eroded any sales mandate that the Key government might try to claim it got from National’s election victory in 2011. Was there truth in packaging ? Hardly. Back then, the political salesmen for the asset sales programme were promising returns of between $5-7 billion, predicting high levels of participation from ordinary “ Mum and Dad “ investors, and asserting that these partial sales made more economic sense than taking on a similar amount of debt. None of these claims have turned out to be true. Oh, and the political salesmen in 2011 never mentioned the massive transaction costs the asset sales process would entail.

    In other words, it is simply not credible to claim that Election Day 2011 settled the asset sales issue once and for all -regardless of what has come to light afterwards, and despite the extra costs and subsidies that have emerged from under the rug. Besides, having 327,774 people (in a country of little over four million) sign a petition in a short space of time is pretty compelling evidence that significant opposition exists to the selldown. The reality is that hundreds of thousands of taxpayers object to the ownership rights of their assets being altered so that only a fortunate few can make a killing. The process also involves generational theft, in that future generations will be denied the full benefits of the assets they inherit from us. With that in mind, the claim that we have no right to revisit this matter between elections is pretty outrageous. ( It is exactly like being robbed, and then sworn to silence by the robber.)”

    Like

  2. Andrei says:

    The core business of Government does not involve running an airline

    You a communist or something?

    Like

  3. Viv K says:

    This sale was announced on Sunday and will be virtually complete before any discussion on it can occur in Parliament. It may all be legal and above board, but the public perception will be that it is sneaky and rushed. (quote marks, ta)

    Like

  4. Quintin Hogg says:

    Robert,

    Thank you. Your comments assisted me come to the decision to instruct my broker to purchase a block of shares Air New Zealand.

    Like

  5. robertguyton says:

    The referendum will reveal what New Zealanders think and feel about the sale of our assets. Ele has made it clear that she has dismissed the result already and that the John Key-led National Government too will ignore the results of the referendum. That’s tells us all a great deal about the regard in which they hold the people of New Zealand. Key declares that he listened to the people at the election when they gave him the mandate to sell, but says now that he won’t listen and somehow expects to sound credible. Still, it doesn’t matter what he thinks. When New Zealanders see that as a people they oppose what Key and his Government have done, they then know what to do at the next ‘referendum’, that is, the election.

    Like

  6. willdwan says:

    “Exactly like being robbed.” What a stupid thing to say. When you are robbed you get nothing in return for what you have lost. Carbon taxes fit that description better.

    Like

  7. robertguyton says:

    Key’s ‘mandate’ is based on falsehoods:
    “Was there truth in packaging ? Hardly. Back then, the political salesmen for the asset sales programme were promising returns of between $5-7 billion, predicting high levels of participation from ordinary “ Mum and Dad “ investors, and asserting that these partial sales made more economic sense than taking on a similar amount of debt. None of these claims have turned out to be true. Oh, and the political salesmen in 2011 never mentioned the massive transaction costs the asset sales process would entail.”

    Like

  8. Gravedodger says:

    Tell im ees dreamin!

    “Opposition to assett sales”????

    How many of the precious 327 779 names on the petition, were not voting from a knowlege base of economic literacy.
    Btw it was not a relatively short time of gathering it very nearly ran out of time and required two very significantly promoted attempts.
    The petition was in no way a spontaneous cry from the people it was an expensive, coerced, promoted on a false premise, effort run by the GP and financed by inappropriate use of state funding even to the point of paying nutters to collect signatures.
    Any perceived loss of capital invested in the ‘floats’,was directly attributable to the threat of “nationalisation” from the Communist Queenslander and his woolgatherer mate.
    One sad fact of the petition promoters was their deliberate effort to call a partial minority sale of the shareholding in SOEs as a sale of the family silver.
    Totally ignored in the whole debate was the salient fact that had Coal Corp SOE been sold around 5 years ago NZ Inc would have banked millions instead of now having to pour millions into the SOE to keep it afloat.

    Helen Kelly describing previous ‘Assett Sales’ as disasters, on Hosking, was that an admission that previous NZLP governments were financial illiterates or just posturing for the media c 2013.
    Can the bint even understand how terrible the service, management and customer satisfaction of The NZ Post Office actually was.
    Waiting months for a copper wire in the street to be connected to a copper wire into a dwelling, having a selection of any phone so long as it was black on a cord around one meter long often located in the coldest part of the home, when we could watch other homes in the world use a phone on a cord that went from room to room.
    Then on privatisiation was found to have warehouses full of outdated redundant technology that had to be dumped.
    Having a bank that only opened for a few hours on five days with queues of people waiting, a postal service that was more about job creation than service.
    That was just one example to those possessing a comprehension to understand just how inefficient, mismanaged and poorly performing the government is when it attempts to “do Business”.

    But carry on idiots, the “New”, even though it already existed assurance scheme announced by Silent t is going gangbusters. Pity the ignoramus does not even understand the historical title reference that has property protected by Insurance contracts and similar protection against untimely death covered by an Assurance policy.

    Tell im ees dreamin.

    Like

  9. robertguyton says:

    Well done, Gravedodger, calling those who hold the opposite view to yours, “idiots”. That’s a braver step than hiding behind “ijits” as you were. Powerful argument too, that “you’re an idiot” one. Big ups!
    Oh, and extra points for tagging the Leader of the Opposition with an obscene title – “Silent t” – that’s pure Right-wing class right there!

    Like

  10. Paranormal says:

    As Air NZ is already floated ion the stock exchange there are no ‘massive transaction [set up] costs’. Just an order to the broker to sell at a five year high in the share price.

    Liarbour stepped in to ‘save’ AirNZ when their foray into Australia with Ansett went horribly wrong. That the government never owned 100% and are only now selling off 25% seems to be missing from the lefts propaganda.

    Like

  11. Mr E says:

    Robert the financial advisor?

    Like

  12. Gravedodger says:

    So Double Dipton is OK, even though he did nothing illegal any more than your oh so hypocritical Melons did with their housing rort in Wellywood.
    I guess you consider the bro rant on the bus roof at the Otara markets by Mr “T’ where he referred to the greasy fella in the blue suit was kosher also.
    Don’t be such a limp dick Mr Shilling Guyton, I can smell your decaying hypocrisy from here.
    I am sure Mummy will kiss you better.

    Like

  13. TraceyS says:

    Beware your omnipotence, Robert. Russel should have when mooting the money-printing idea. Learn from your leader, he did not hold the mood of the Nation in his palm.

    People may tick “no” with their pen but it’s how firmly they press on the paper that really counts. I’d suggest only 10-15% will cut right through and mark the table. Make sure you put something down to avoid a telling-off from your wife.

    Like

  14. Mr E says:

    Yeah Nah

    Like

  15. robertguyton says:

    Keeping Stock on asset sales:

    “Anyone with half a financial brain knows that you sell high.”

    Meridian Energy, anyone? Mighty River Power?

    That guy’s classic! One of the Left’s minor ‘assets’.

    Like

  16. robertguyton says:

    danyl don’t like it at all:
    “Talking and thinking about the government’s asset sales – sorry: partial privitisation – policy this weekend, the following points seem valid:

    The partial privitisation policy is the Key government’s flagship policy for this term.
    It is a disaster.
    There isn’t much comment on this in the media
    Maybe I’m wrong about point 2 or 3? But looking back at the pre-election promises, the intent was to raise up to $7 billion dollars. It looks like Key and English will end up spending hundreds of millions more on the sales process than they promised and end up with less than $5 billion, which is less than their lowest estimate. And yes, you can point to reasons it’s been a disaster. Solid Energy was supposed to be worth billions but is actually worthless, Meridian’s major customer is threatening to close down, and extorted the government out of $30 million dollars, the Greens and Labour have sabotaged the economy by failing to support the privitisation process and having energy policies of their own. But Key and English are supposed to be financial super-geniuses: couldn’t they have NOT, say, mis-managed Solid Energy into the ground, or anticipated the Rio Tinto problem? Like I said, this is their flagship policy, and the last two years have mostly consisted of National failing to anticipate really obvious problems – like the opposition opposing it – until they blow up in their face and cost the taxpayers tens of millions of dollars.”

    Like

  17. robertguyton says:

    And…
    “I think there’s some conventional wisdom involved: the general media impression of Key is that he has magic powers, at least in financial terms, while English is a ‘safe pair of hands’, also ‘dour’, ‘Scottish’ a ‘Southlander’, ‘frugal’ and so-on. The reality seems to be the exact opposite: they’ve hemorrhaged taxpayer money while botching their flagship policy. (If you add up the amount of money ‘dour, frugal’ Bill English has simply given away to the commercial sector in the last five years it’d probably be close to the two billion dollar mark.) But commentators would have to challenge their core assumptions about contemporary politics before the scale of the failure here became obvious.

    Like

  18. Quintin Hogg says:

    Rob Hosking in the NBR does a good job calling out the lunacy of the Green and Labour response to the sale of 26% of the shares in Air NZ.
    Which I might add will take the governments shareholding in the company from 77% to 51%.

    Like

  19. robertguyton says:

    Hosking. NBR. Yes.

    Those opposed to Key’s asset flog-off (the majority of New Zealanders that is) will regard the quick-fire sale of the AirNZ shares as a slap in the face and an up-you from Key and National. That’s going to hurt National’s electoral chances real bad. Real sad.

    Like

  20. Richard says:

    Educational Review Authority (ERO) – extract: Homepaddock School Of Intelligent Debate
    ” -ERO agrees with the Principal, Ele, that Robert Guyton is disruptive for the class: Robert exhibits symptoms normally seen in children:
    Attention Deficit disorder (ADD), the are variously:

    Often does not give close attention to details or makes careless mistakes in schoolwork, work, or other activities.
    Often has trouble keeping attention on tasks or play activities
    Often does not seem to listen when spoken to directly.
    Often does not follow instructions and fails to finish schoolwork, chores, or duties in the workplace (not due to oppositional behavior or failure to understand instructions).
    Often has trouble organizing activities.
    Often avoids, dislikes, or doesn’t want to do things that take a lot of mental effort for a long period (such as schoolwork or homework).
    Often loses things needed for tasks and activities (e.g. toys, school assignments, pencils, books, or tools).
    Is often easily distracted.
    Is often forgetful in daily activities.

    Clearly, it is a virus that had moved to adults.
    ————

    Like

  21. TraceyS says:

    AD*H*D

    You forgot that all-important “hyperactivity” bit!

    Like

  22. TraceyS says:

    And if it doesn’t? Long way back from nowhere for the Labour and Green parties.

    No doubt just as many would like to see that as will say no to asset sales. Possibly even quite a bit of overlap.

    Like

  23. jabba says:

    I keep telling him to take his ritalin .. gee, he needed some last night.

    Like

  24. robertguyton says:

    It’s going to an exciting time for us all, Tracey. Will the results of the referendum predict the result of the general election in 2014?
    I reckon it just might!
    Whoopee!

    Like

  25. robertguyton says:

    Some of the world’s greatest thinkers would have been diagnosed ADD, had it been described when they were young.
    So, thanks Richard.
    Also, good effort with the satirical piece. It’s so gratifying to know that I’m helping to free the inner creative-writer in some of you usually-dour Homepaddock regulars.

    Like

  26. robertguyton says:

    Oh and Tracey, thanks for your clarification. I missed it the first time, what with my ADHD ‘n all.

    Like

  27. Viv K says:

    ERO of course, does not report on individual students.

    Like

  28. Viv K says:

    We have been told that it is a good time to sell Air NZ shares because the sharemarket is up. Apparently our sharemarket is up because Wall St is bouyant and that is because they are still printing money in the USA. It’s a funny old world eh.

    Like

  29. Blokeinauckland says:

    Guyton – you are a duplicitous coward. If you really believed the Government should not put the $30Million into Southland jobs via Rio Tinto then you should campaign on that as you are a local Southland politician. I’ll bet you didn’t and don’t have the fortitude to do it. No one wanted to call the bluff of Rio Tinto and you know it. Key and English have very successfully ring fenced that problem. Next time Rio try that stunt the surplus energy will be spoken for elsewhere.

    By the way the worthlessness of Solid Energy came as a result of their mad pursuit of so called green technology.

    Like

  30. Armchair Critic says:

    Best you explain how “the ministers responsible for Solid Energy requiring increased borrowing to fund increased dividend payments” is the same as “[the] mad pursuit of so called green technology”, BIA.
    Solid Energy’s demise was largely driven by our inexperienced and incompetent Minister of Finance, Bill English.

    Like

  31. Blokeinauckland says:

    Solid Energy and its board were hellbent on diversifying into green technology. They borrowed money to facilitate that – and those are facts.

    Like

  32. Blokeinauckland says:

    Yes, they (the USA) took a leaf out of Russel Norman’s playbook.

    Like

  33. TraceyS says:

    Richard’s “Educational Review Authority” is of course entirely fictional and distinct from the real Education Review Office (ERO).

    Like

  34. TraceyS says:

    No problem, I’m here to help anytime you need it 🙂

    Like

  35. TraceyS says:

    The turnout is more telling. I predict it will be low.

    Like

  36. robertguyton says:

    “Hellbent”

    Good assessment, bloke, of both Solid Energy and the National Government.

    Like

  37. Armchair Critic says:

    The management report to the board. The board report to the ministers. The ministers’ role includes ensuring the company is viable in the long term. The company has failed, big time, and is now, in the words of one of the ministers, “virtually worthless.”
    A competent minister would have said “no, these green technologies you are hellbent on diversifying into are a poor idea. Stick to coal mining.” A competent minister would have understood that requiring increased dividends and instructing that they are paid from increased borrowing will put a company more at risk.
    Solid Energy failed because the National Party ministers responsible for it did not do their jobs. Those National Party minister did not do their jobs either because they are incompetent, or inexperienced in the real world, or both.Or perhaps you have a better explanation of how they stuffed it up so badly. If you wish to blame the board or the management, or something more ethereal like “green technology”, you should demonstrate how the ministers should not and could not have known. Good luck.

    Like

  38. Armchair Critic says:

    I suspect Richard pines for an authoritarian nanny state government that controls who can comment on blogs, and what they can say. He’s fortunate that National are taking us down that path.

    Like

  39. Paranormal says:

    In the immortal words – “tell him he’s dreamin”. If the economy continues to strengthen and the Greens and Liarbour continue their disconnection with the public through their blatant economic sabotage and grandstanding, National are a shoe in next election.

    Like

  40. Paranormal says:

    Similar to what’s seen on left aligned blogs and what we’d get with a Liarbour/Greens Authoritarian government?

    Like

  41. Paranormal says:

    And that’s why the US has such structural problems in their economy that a GFC2 is not out of the question. Their economy is hooked on QE and they just can’t seem to break the habit. The debt levels under Obama are staggering and it’s hard to see their economy ever recovering.

    Like

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