After Ansett, the Plug Gets Pulled at Air New Zealand
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From the New Zealand Herald
Air NZ share trading suspended again
28 September 2001
The Stock Exchange Market Surveillance Panel again suspended trade in Air New Zealand shares today amid speculation the airline has defaulted on loans, an $850 million rescue package has collapsed and the Government was poised to take control.
The panel said trade had been halted pending clarification of statements made by Brierley Investments chief executive Greg Terry.
"When we are ready to make an announcement we will," spokesman Mark Champion said.
The exchange said it was comments reported by Mr Terry in The New Zealand Herald which had prompted the suspension.
Mr Terry was reported as "talking up" Air NZ shares, saying they would quickly climb to 60c if there was an announcement the airline would continue.
Brierley Investments is a 30 percent shareholder in the airline.
Shares in the airline were suspended on Wednesday following comments by Prime Minister Helen Clark on Tuesday night telling shareholders to hang on to their shares. Trading resumed trade later on Wednesday.
Air NZ's residents-only A shares closed at 40 cents yesterday as did the freely tradeable B shares.
28 September 2001
The Stock Exchange Market Surveillance Panel again suspended trade in Air New Zealand shares today amid speculation the airline has defaulted on loans, an $850 million rescue package has collapsed and the Government was poised to take control.
The panel said trade had been halted pending clarification of statements made by Brierley Investments chief executive Greg Terry.
"When we are ready to make an announcement we will," spokesman Mark Champion said.
The exchange said it was comments reported by Mr Terry in The New Zealand Herald which had prompted the suspension.
Mr Terry was reported as "talking up" Air NZ shares, saying they would quickly climb to 60c if there was an announcement the airline would continue.
Brierley Investments is a 30 percent shareholder in the airline.
Shares in the airline were suspended on Wednesday following comments by Prime Minister Helen Clark on Tuesday night telling shareholders to hang on to their shares. Trading resumed trade later on Wednesday.
Air NZ's residents-only A shares closed at 40 cents yesterday as did the freely tradeable B shares.
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Skol,
All I have posted is direct quotes from NEW ZEALAND newspapers. I did NOT add ANY personal comments because of people like you.........
However you STILL have to say something????
"lame"
BUSINESS
FRIDAY, 28 SEPTEMBER 2001
B U S I N E S S S T O R Y
Govt poised to re-take control of Air NZ - reports
28 September 2001
Air New Zealand was in danger of financial collapse and the Government was poised to retake control, according to reports in major newspapers today.
The Government is expected to take a massive equity stake, either directly or by underwriting an issue of new shares to existing shareholders, The Dominion reported.
It said that Air New Zealand had defaulted on a $70 million loan to the ANZ Bank on Thursday.
"As a result of the default, other banks which form part of a syndicate with ANZ called in their secured loans, amounting to about $900 million," it reported.
The next day, the board demanded that major shareholders Singapore Airlines and Brierley Investments commit immediately to an $850 million rescue package, which included $300 million in cash from them, or Air New Zealand would be put into statutory management.
The Dominion quoting unnamed sources close to the negotiations saying Singapore and Brierley told the board they were not prepared to commit to the rescue plan before completing their own due diligence. However, the collapse of the Air New Zealand share price in recent weeks meant the rescue plan no longer raised enough money.
"It is understood that the Government was advised that a new plan needed to be finalised quickly and that Air New Zealand did not have the luxury of allowing up to six weeks for key shareholders to conduct due diligence."
Yesterday, Brierley chief executive Greg Terry said things had changed dramatically from two weeks ago when the rescue package was announced.
"The situation two weeks ago and the situation today are two different worlds," he said after Brierley announced it lost $US119.60 million ($NZ299 million) in the year ending June 30 due to Air NZ's writedown of its collapsed Australian subsidiary, Ansett.
"Air NZ is no longer an airline seeking government support. It is now one of every airline in the world seeking government support.
"It is obviously no longer the case that $300 million in equity is enough."
Air New Zealand had to negotiate a new arrangement, and talks between it and ANZ were under way when the loan facility fell due.
The Dominion quoted banking sources saying syndicate members would have agreed not to demand immediate payment of loans, subject to a rescue plan being finalised, while at the same time reserving the right to demand repayment at any time.
The chairman of Melbourne-based ANZ Group, Charles Goode, resigned from the Air New Zealand board the same day without explanation. He had represented Singapore Airlines on the board. He refused to comment when asked why he resigned.
Air New Zealand chief executive Gary Toomey, also an ANZ Bank director, has taken leave of absence from the ANZ Group board.
Government negotiator Rob Cameron supported ANZ Bank continuing to offer Air New Zealand a lending facility, sources said.
An industry analyst said the Government could end up owning between 31 per cent and 83 per cent of Air New Zealand. This depended on shareholder participation in a one-for-three rights issue at 20 cents a share to raise $450 million and the Government injecting a further $550 million, previously earmarked as a loan.
Meanwhile, Air New Zealand's 9000 staff in an open letter today, are calling on the public to support the airline and help keep it flying.
The New Zealand Herald said the company had failed to win a final commitment from major shareholders to the airline's $NZ850 million rescue plan.
The airline's board was forced to adjourn another marathon meeting after failing to secure the firm support of either Singapore Airlines and Brierley Investments.
In a brief statement Air New Zealand said its board had had a "useful" day's talks but would reconvene early next week.
"There are matters that require further consideration by the major shareholders and the New Zealand Government before we are able to complete the business on our agenda," said acting chairman Jim Farmer.
Under the recapitalisation plan, both Singapore Airlines and Brierley were to each buy another $NZ150 million worth of new Air New Zealand shares at NZ67c a piece.
The New Zealand Government, which under the current plan would make available to Air New Zealand debt facilities worth $NZ550 million, is considering taking an equity stake in the airline, given it is already overloaded with debt.
Analysts suggested the NZ Government might seek to negotiate with a statutory manager to take control of its flag carrier, the Herald reported.
If Air New Zealand collapsed, it would leave the country without a domestic or an international airline after Qantas New Zealand collapsed in April.
There were also suggestions Qantas might seek to re-engineer an alliance with Air New Zealand.
"It would be a value-added move for Qantas if they could get a stake in Air New Zealand," said Macquarie Equities' transport analyst, Ian Myles.
"However, there are a lot of factors in play."
But most suggested competition regulators would never allow Qantas to buy into Air New Zealand after the demise of Ansett.
The Flying Kangaroo already stood to dominate the Australia aviation market and, should it take Air New Zealand under its wing, would hold a near-monopoly in New Zealand and on trans-Tasman routes.
All I have posted is direct quotes from NEW ZEALAND newspapers. I did NOT add ANY personal comments because of people like you.........
However you STILL have to say something????
"lame"
BUSINESS
FRIDAY, 28 SEPTEMBER 2001
B U S I N E S S S T O R Y
Govt poised to re-take control of Air NZ - reports
28 September 2001
Air New Zealand was in danger of financial collapse and the Government was poised to retake control, according to reports in major newspapers today.
The Government is expected to take a massive equity stake, either directly or by underwriting an issue of new shares to existing shareholders, The Dominion reported.
It said that Air New Zealand had defaulted on a $70 million loan to the ANZ Bank on Thursday.
"As a result of the default, other banks which form part of a syndicate with ANZ called in their secured loans, amounting to about $900 million," it reported.
The next day, the board demanded that major shareholders Singapore Airlines and Brierley Investments commit immediately to an $850 million rescue package, which included $300 million in cash from them, or Air New Zealand would be put into statutory management.
The Dominion quoting unnamed sources close to the negotiations saying Singapore and Brierley told the board they were not prepared to commit to the rescue plan before completing their own due diligence. However, the collapse of the Air New Zealand share price in recent weeks meant the rescue plan no longer raised enough money.
"It is understood that the Government was advised that a new plan needed to be finalised quickly and that Air New Zealand did not have the luxury of allowing up to six weeks for key shareholders to conduct due diligence."
Yesterday, Brierley chief executive Greg Terry said things had changed dramatically from two weeks ago when the rescue package was announced.
"The situation two weeks ago and the situation today are two different worlds," he said after Brierley announced it lost $US119.60 million ($NZ299 million) in the year ending June 30 due to Air NZ's writedown of its collapsed Australian subsidiary, Ansett.
"Air NZ is no longer an airline seeking government support. It is now one of every airline in the world seeking government support.
"It is obviously no longer the case that $300 million in equity is enough."
Air New Zealand had to negotiate a new arrangement, and talks between it and ANZ were under way when the loan facility fell due.
The Dominion quoted banking sources saying syndicate members would have agreed not to demand immediate payment of loans, subject to a rescue plan being finalised, while at the same time reserving the right to demand repayment at any time.
The chairman of Melbourne-based ANZ Group, Charles Goode, resigned from the Air New Zealand board the same day without explanation. He had represented Singapore Airlines on the board. He refused to comment when asked why he resigned.
Air New Zealand chief executive Gary Toomey, also an ANZ Bank director, has taken leave of absence from the ANZ Group board.
Government negotiator Rob Cameron supported ANZ Bank continuing to offer Air New Zealand a lending facility, sources said.
An industry analyst said the Government could end up owning between 31 per cent and 83 per cent of Air New Zealand. This depended on shareholder participation in a one-for-three rights issue at 20 cents a share to raise $450 million and the Government injecting a further $550 million, previously earmarked as a loan.
Meanwhile, Air New Zealand's 9000 staff in an open letter today, are calling on the public to support the airline and help keep it flying.
The New Zealand Herald said the company had failed to win a final commitment from major shareholders to the airline's $NZ850 million rescue plan.
The airline's board was forced to adjourn another marathon meeting after failing to secure the firm support of either Singapore Airlines and Brierley Investments.
In a brief statement Air New Zealand said its board had had a "useful" day's talks but would reconvene early next week.
"There are matters that require further consideration by the major shareholders and the New Zealand Government before we are able to complete the business on our agenda," said acting chairman Jim Farmer.
Under the recapitalisation plan, both Singapore Airlines and Brierley were to each buy another $NZ150 million worth of new Air New Zealand shares at NZ67c a piece.
The New Zealand Government, which under the current plan would make available to Air New Zealand debt facilities worth $NZ550 million, is considering taking an equity stake in the airline, given it is already overloaded with debt.
Analysts suggested the NZ Government might seek to negotiate with a statutory manager to take control of its flag carrier, the Herald reported.
If Air New Zealand collapsed, it would leave the country without a domestic or an international airline after Qantas New Zealand collapsed in April.
There were also suggestions Qantas might seek to re-engineer an alliance with Air New Zealand.
"It would be a value-added move for Qantas if they could get a stake in Air New Zealand," said Macquarie Equities' transport analyst, Ian Myles.
"However, there are a lot of factors in play."
But most suggested competition regulators would never allow Qantas to buy into Air New Zealand after the demise of Ansett.
The Flying Kangaroo already stood to dominate the Australia aviation market and, should it take Air New Zealand under its wing, would hold a near-monopoly in New Zealand and on trans-Tasman routes.
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Just had some info via the ether.. .. .Probably of little value considering recent events. Two things have been raised.. .. .1. Apparently all aircraft from a particular carrier were refuelled on an Ansett account through a jointly controlled company. There appears to be no record of the account being paid.. .. .2. Some aircraft must have been fully laden, as they required an additional engine on their west east runs. But only on the west east runs and in particular just a few days before Ansett stalled. There must have been some concerns with the reliability of the engines/airframe. They had plenty of spare parts on board. I expect that they intended to make some mid air repairs.. .. .There must be a vampire carrier on the loose. Beware. .. .The source is unknown but reliable.
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TGL. .. .Methinks that there are going to be some red faces, rapid reversals and stunning back flips in the near future from the characters surrounding this little fiasco.. .. .It is going to be exquisitely fascinating watching how the unequivocal "we have checked very thoroughly and this has not happened" is translated by the spin doctors to "I know that's what we said, but it's not what we meant." <img border="0" title="" alt="[Roll Eyes]" src="rolleyes.gif" /> . .. .I was going to say that this would be good material for the Monty Python scripwriters until I remembered the "Dead Parrot" sketch. <img border="0" title="" alt="[Big Grin]" src="biggrin.gif" /> . .. .BTW that was one of great movies. Maaaaaaaaaaaaax. <img border="0" title="" alt="[Big Grin]" src="biggrin.gif" />
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Hi Guv - long time no see.. .. .I do feel for those that may be badly affected by the problems within NZ but the glass mountain has been looming in front of them for some time with the idiotic management that drove the final nail into Ansett's coffin.. .. .The "Erebus" culture has not been exorcised and yield management and customer support systems are to say the best early 70's models. I use this example with no reserve as our office (TN_WNY) had a passenger aboard the ill fated DC10.. .. .Some really lovely staff make up for this in part but basically the duck is dead.. .. .Maybe now some will pay the price of lack of due dilligence - the sad thing is the good and honest front-liners who are at risk.. .. .Best all. .. .EWL
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"Rumours" should at least be topical!! - How on earth has this thread based on last September's news, not to mention 1979's news (Erebus), and comprising not wholly, but largely, of resurrected posts from last year been alowed to continue - it offers nothing new, merely providing another outlet for the venom of inveterate Kiwi bashers - thanks tho to the few balanced contributors who are not in those ranks -many of the contributors do not seem to realise that MANY airlines worldwide - are in difficult times - that QF has been preserved thus far is fortunate, and I congratulate Australia on that - to date - lucky set of chance events which has kept QF profitable - but give everyone else a chance as well - .
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Although not an employee, I was closely involved with AN at the time NZ came in. They very quickly and without due consideration erased the AN management structure and disposed of most of the managers. Whilst replacement of people is not a new technique for stamping the new owners authority I have never seen the entire management structure just thrown out before it was analysed to see how it worked. The replacement structure (not the people but the structure) was flawed in the design in such fundamental ways that there was no clear management line and no reporting structure at all. In times where business is moving to flater structures ANZ introduced two extra management levels. Next the people were selected to fill the structure. Apparently (as it appeared at the time) the major qualification required to be allocated a management slot was current employment at ANZ (not AN). Many if not most of the posts had little or no management experience, and even less knowledge of Ansett the business. The structural changes imposed by the ANZ board (Sir Selwyn actually) then required months and months of wasted time (and huge sums of money as well) whilst everybody tried to figure out how this mess was supposed to work. It was certainly clear to me at the time that it was never going to work, and that another major restructure was required.. .. .This did occur but with no more success than the first ANZ attempt.. .. .It was about then that my involvement with AN ceased and I can't comment first hand as to the internal workings of the business from that point forward, however whilst I was there, the management at board and direct board report level was totally incompetent, and Mr Toomey had not had any real impact (whether he ever did or not, I can't say).. .. .Other things that were very apparent in that late 2000, early 2001 period were that ANZ had no financial control even within ANZ, let alone AN, and that they (as a result) didn't have any financial reserves. They were living day by day on cash flow, which was diminishing, and despite Sir Selwyns public statements that $200M would be saved by the integration of the airlines (he never did specify over what period) there were never any savings actually made. In fact a great deal was spent on so called integration to achieve no real gains in any respect. I believe that Sir Selwyn was mainly concerned that SQ would take over, and cast aside the ANZ parts of the business, and his integration attempts were more to prevent this happening than any aim of cost reductions.. .. .From a commercial / business perspective ANZ should have laid down and died some time ago. From a heart felt perspective, the workers at ANZ are just as willing and competent as their counter parts at AN were, and they have my sympathy for what must ultimately be the demise of the airline.. . . . <small>[ 25 March 2002, 09:22: Message edited by: Feeton Terrafirma ]</small>
