Air New Zealand (NZ, Auckland International) has raised NZD1.2 billion New Zealand dollars (USD772.8 million) by concluding an equity rights offer as part of a broader NZD2.2 billion (USD1.4 billion) recapitalisation, the airline announced.

"The capital raised will allow us to repay the government loan and strengthen our balance sheet as part of the broader NZD2.2 billion recapitalisation. The company continues to progress its debt capital markets transaction. Having refuelled, our full focus now turns to reconnecting New Zealand with the world and playing our part in New Zealand's recovery from COVID-19,” commented Air New Zealand Chairwoman Therese Walsh.

Air New Zealand is 51.9% owned by the New Zealand government, which kept it afloat during the pandemic with state aid of NZD2 billion (USD1.39 billion), most recently with an additional support package in December 2021.

Walsh, in a statement, said the airline was “over the moon” with the success of the rights offer. “Millions of shareholders took part, taking up 100% of the rights available, exceeding our expectations and benchmarks for this type of offer."

The airline reported significant interest in the bookbuild with a final price of NZD0.81 (USD0.52), which was a premium to the offer price of NZD0.28 (USD0.18) per share. Shareholders who did not participate were still able to receive value for their rights through the bookbuild process. Eligible shareholders who elected not to take up their entitlements and ineligible shareholders would receive NZD0.81 for each share sold for their benefit in the bookbuild.

As reported, the rights issue forms part of a tri-partite strategy to recapitalise the airline. In addition, NZD600 million (USD417 million) of redeemable shares to the government are to be refinanced through a bond issuance by June 30. A new NZD400 million (USD278 million) state loan will also replace the existing loan facility, to be available to the airline until January 2026.