No private sale of Air N.Z. shares
By
MARTIN FREETH
in Wellington
The Minister of Transport, Mr Prebble, has ruled out any private share sale in Air New Zealand on the ground that this would probably not be successful, and that the company does not need the capital. Mr Prebble said yesterday the Air New Zealand board had advised him that a public float would not be appropriate, in view of the world-wide decline in the profitability of airlines. “If we had a private shareholding float it would very likely sink, and that is not in the interests of the Government. "We do not think we would get, at the monment, what the airline is really worth,” Mr Prebble said.
He said the previous Government had instructed Air New Zealand to look at proposals for a private share issue and Labour had been able to study those. Mr Prebble dismissed National Party promises to privatise Air New Zealand as “ideological nonsense,” and irresponsible towards the company. While the airline’s annual report tabled in Parliament says its capital base is relatively low for the airline industry, Mr Prebble said Air New Zealand did not need any new capital injection in the way that other Stateowned enterprises did. Its assets were enormous in relation to its debts, particularly when its $1.5 billion in new aircraft purchases since 1981 were taken into account.
Mr Prebble said there was no question of extra taxpayer funds being required for Air New Zealand.
The Government has, however, agreed to boost Air New Zealaand’s share capital by more than half through the conversion of $BO million of the company’s reserve funds into shares held by the taxpayer. Mr Prebble said that that was an overdue move and would be done now to show Government support for Air New Zealand, which would help the airline commercially. The conversion of reserves into shares would prevent any future Government from taking that $BO million for other purposes if it decided no longer to support the airline, he said.
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Press, 19 September 1986, Page 4
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338No private sale of Air N.Z. shares Press, 19 September 1986, Page 4
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