Breaking : AirNZ Receivership
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Breaking : AirNZ Receivership
From reliable source Airliner Net:
Username: Oz777
Posted 2001-09-24 01:07:50 and read 123 times.
According to radio reports coming out of NZ, the Air New Zealand share price has tumbled to such an extent this morning (Monday) that the banks have moved to call in the loans. The Air NZ Board has been left with no option but to declare receivership.. If Air NZ continued to trade at a loss then the directors would be liable for any additional debt.
Singapore's willingness to NOT honour agreements was a major factor.
A formal announcement is expected in a couple of hours.
Oz777
Username: Oz777
Posted 2001-09-24 01:07:50 and read 123 times.
According to radio reports coming out of NZ, the Air New Zealand share price has tumbled to such an extent this morning (Monday) that the banks have moved to call in the loans. The Air NZ Board has been left with no option but to declare receivership.. If Air NZ continued to trade at a loss then the directors would be liable for any additional debt.
Singapore's willingness to NOT honour agreements was a major factor.
A formal announcement is expected in a couple of hours.
Oz777
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[Dow Jones] Air NZ's market cap slumps to NZ$130 million from NZ$1.2 billion six months ago after shares collapse, making government and shareholder rescue plan look even shakier. Recap package set at maximum price of 67 NZ cents for Singapore Airlines and Brierley Investments ), but A shares at record low 16 cents and B-shares 15 cents. NZ PM Helen Clark fuels speculation NZ flag carrier could be headed for statutory management, a form of administration, calls it "a viable option". (IGP)
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BUSINESS
MONDAY, 24 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ shares plunge as concerns mount
24 September 2001
Air New Zealand shares plunged into the "penny dreadful" class today as worries about the future of the airline mounted.
Air NZ's unrestricted B shares dropped 10 cents to 16 cents in the first hour of trading today while the New Zealand resident-only A shares fell 12 cents to 17 cents.
That values the airline at just $125 million.
Speculation mounts that Air New Zealand will be placed in statutory management in the next few days.
The company's acting chairman Jim Farmer put out a statement at midnight desperately seeking to reassure stakeholders of the stricken company.
After a crisis board meeting at the weekend was adjourned, he said good progress had been made on recapitalisation and bringing forward the $850 million rescue package.
Air NZ just two years ago was capitalised at $2.5 billion.
ABN Amro broker Nigel Scott some of the small investors who had propped the share price on a punt of survival were turning their positions around and "wondering just what does statutory management mean".
The sharemarket itself continued last week's plunge, dropping another 1.4 percent in the first hour, but Mr Scott said placing the company into statutory management could actually help both Air NZ and the sharemarket sentiment.
"People have largely priced that (statutory management) in to tell you the truth," he said. "People would be more confident of survival and go and book on the planes. I think it would help the situation."
"This is horrendous," said Forsyth Barr Frater Williams executive director Don Turkington. "This is extraordinary and shows all sorts of concerns about the future of Air New Zealand. It is relentless - it goes on day after day."
"The fact that they had meetings going on all weekend and they still didn't come to any resolution leads investors to smell a rat."
He said there were just no buyers for Air NZ shares. The fall follows on from a very big fall on Friday.
"If you look at Air NZ B, it's down 38 percent and there has only been 1.4 million shares being able to get out. The sellers are only moving any volume by absolutely crunching the price."
Asked if Air NZ can survive as a listed company with such a dramatic fall in its price, Dr Turkington said it was theoretically possible but doubtful.
The $850 million rescue package agreed earlier this month between major shareholders, Singapore Airlines (25 percent) and Brierley Investments (30 percent) and the Government, was largely untenable with such a share price fall.
To inject the $300 million in new equity that the two major shareholders had agreed to, would require the issue of 1.75 billion new shares compared with the current 756 million shares on issue.
The weak price means it is virtually impossible to have a rights issue because there is no room left to discount the share price.
"These kind of share prices make equity refinancing incredibly difficulty," said Dr Turkington.
"The market is saying the rescue package has got all sorts of question marks over it and that the aviation business environment has changed fundamentally."
Mr Turkington said the Air NZ-Ansett debacle was doing New Zealand's standing and reputation huge harm.
"Undoubtedly, this will damage New Zealand's markets. Everyone has said this is an icon, one of the few companies bearing New Zealand's name and it is a flag carrier. If it should go into effective bankruptcy, it's got to damage New Zealand's reputation," he said.
Aside from that, New Zealand would be stuck without a national airline carrier if it failed completely.
Neither Air New Zealand nor Finance Minister Michael Cullen would comment on the share price fall today or other developments.
The Securities Commission would not comment on whether it had been contacted by Air NZ regarding statutory management. A spokeswoman said no inference should be taken from that.
MONDAY, 24 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ shares plunge as concerns mount
24 September 2001
Air New Zealand shares plunged into the "penny dreadful" class today as worries about the future of the airline mounted.
Air NZ's unrestricted B shares dropped 10 cents to 16 cents in the first hour of trading today while the New Zealand resident-only A shares fell 12 cents to 17 cents.
That values the airline at just $125 million.
Speculation mounts that Air New Zealand will be placed in statutory management in the next few days.
The company's acting chairman Jim Farmer put out a statement at midnight desperately seeking to reassure stakeholders of the stricken company.
After a crisis board meeting at the weekend was adjourned, he said good progress had been made on recapitalisation and bringing forward the $850 million rescue package.
Air NZ just two years ago was capitalised at $2.5 billion.
ABN Amro broker Nigel Scott some of the small investors who had propped the share price on a punt of survival were turning their positions around and "wondering just what does statutory management mean".
The sharemarket itself continued last week's plunge, dropping another 1.4 percent in the first hour, but Mr Scott said placing the company into statutory management could actually help both Air NZ and the sharemarket sentiment.
"People have largely priced that (statutory management) in to tell you the truth," he said. "People would be more confident of survival and go and book on the planes. I think it would help the situation."
"This is horrendous," said Forsyth Barr Frater Williams executive director Don Turkington. "This is extraordinary and shows all sorts of concerns about the future of Air New Zealand. It is relentless - it goes on day after day."
"The fact that they had meetings going on all weekend and they still didn't come to any resolution leads investors to smell a rat."
He said there were just no buyers for Air NZ shares. The fall follows on from a very big fall on Friday.
"If you look at Air NZ B, it's down 38 percent and there has only been 1.4 million shares being able to get out. The sellers are only moving any volume by absolutely crunching the price."
Asked if Air NZ can survive as a listed company with such a dramatic fall in its price, Dr Turkington said it was theoretically possible but doubtful.
The $850 million rescue package agreed earlier this month between major shareholders, Singapore Airlines (25 percent) and Brierley Investments (30 percent) and the Government, was largely untenable with such a share price fall.
To inject the $300 million in new equity that the two major shareholders had agreed to, would require the issue of 1.75 billion new shares compared with the current 756 million shares on issue.
The weak price means it is virtually impossible to have a rights issue because there is no room left to discount the share price.
"These kind of share prices make equity refinancing incredibly difficulty," said Dr Turkington.
"The market is saying the rescue package has got all sorts of question marks over it and that the aviation business environment has changed fundamentally."
Mr Turkington said the Air NZ-Ansett debacle was doing New Zealand's standing and reputation huge harm.
"Undoubtedly, this will damage New Zealand's markets. Everyone has said this is an icon, one of the few companies bearing New Zealand's name and it is a flag carrier. If it should go into effective bankruptcy, it's got to damage New Zealand's reputation," he said.
Aside from that, New Zealand would be stuck without a national airline carrier if it failed completely.
Neither Air New Zealand nor Finance Minister Michael Cullen would comment on the share price fall today or other developments.
The Securities Commission would not comment on whether it had been contacted by Air NZ regarding statutory management. A spokeswoman said no inference should be taken from that.
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BUSINESS
MONDAY, 24 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ workers fearful over jobs
24 September 2001
By ANDREW MOFFAT and MATT CONWAY
Air New Zealand workers hold grave fears for their jobs, as efforts to avert statutory management nosedive.
The Press understands jittery staff have begun clearing out possessions from work in preparation for job losses, as big shareholders Singapore Airlines and Brierley Investments refuse to commit to a $300 million bail-out.
Airline Pilots' Association (ALPA) vice-president Paul Lyons said the plunging share price, the uncertain attitude of the big shareholders, and the depressed international market had members worried.
Air NZ shares are in free-fall. The airline's unrestricted B shares ended local trading on Friday down 4c at 26c, and A shares (NZ residents only) fell 2c to 29c.
"It's not a very pretty picture is it?" Mr Lyons said.
"I think you have your head in the clouds if you were not concerned about your job at this time. People are looking at it and applying their own logic."
ALPA had been fielding many calls from worried members, but staff were maintaining high standards, and keeping planes flying safely and efficiently, he said.
Air NZ spokeswoman Rosie Flay acknowledged that some staff may be feeling nervous about the airline's future, but scotched suggestions of redundancy fever.
"We haven't had that response at all from our staff," she said. "Individuals may be feeling that themselves. It's a natural thing, because there has been a lot of turbulence in the airline.
"But the message from the airline is one of encouragement, and continuing on as normal."
Engineering, Printing and Manufacturing Union national secretary Andrew Little said that although staff were worried, there was no need for panic. "My advice is for people just to carry on as normal."
The ultimate solution lay with the Government and the shareholders, and members were simply doing their best to keep the airline functioning, Mr Little said.
But the Government refuses to blink as Air NZ's financial position continues to haemorrhage, sticking to what appears to be an increasingly untenable bail-out deal while due diligence is completed. That could take weeks.
National deputy leader Bill English said: "The Government has days – not weeks – to sort it out. That's probably a view that the shareholders, and the bankers, are coming to as well."
Prime Minister Helen Clark and Minister of Finance Michael Cullen are refusing to be drawn into speculation on Air NZ's future.
A spokesperson for Dr Cullen said: "It's a bitch of a story for you guys, but it's a bigger bitch for us, and he (Dr Cullen) is not going to feed it."
Christchurch aviation analyst Les Bloxham said statutory management appeared to be the most likely scenario.
This would allow Air NZ to continue trading under the control of a manager, while debts and claims against the company were frozen.
If the board sought the appointment of a statutory manager, the request would first go to the Securities Commission, New Zealand's securities watchdog, which would then make a recommendation to the Government.
"That's very much on the cards from what I have heard," he said.
Mr Bloxham said he had fielded many calls in the aviation industry from employees and former employees of the national carrier.
"I feel so sorry for the staff, who have basically given their lives, only to see things fall down in rubble all around them," he said. "There's a lot of sad people out there."
The Government has stepped in to cover Air NZ against acts of war and terrorism with a $US2 billion ($4.9b) indemnity.
Aviation insurance underwriters have given notice to cancel the war risk cover of all international carriers after September 12's terrorist attacks in the United States.
Insurers are renewing policies on new terms to provide limited war risk cover only to airlines considered a good risk, including Air NZ. But the airline's cover of liability to third parties for injury and property damage arising from war or terrorist activity still stood to be slashed from $US2b to $US50 million.
MONDAY, 24 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ workers fearful over jobs
24 September 2001
By ANDREW MOFFAT and MATT CONWAY
Air New Zealand workers hold grave fears for their jobs, as efforts to avert statutory management nosedive.
The Press understands jittery staff have begun clearing out possessions from work in preparation for job losses, as big shareholders Singapore Airlines and Brierley Investments refuse to commit to a $300 million bail-out.
Airline Pilots' Association (ALPA) vice-president Paul Lyons said the plunging share price, the uncertain attitude of the big shareholders, and the depressed international market had members worried.
Air NZ shares are in free-fall. The airline's unrestricted B shares ended local trading on Friday down 4c at 26c, and A shares (NZ residents only) fell 2c to 29c.
"It's not a very pretty picture is it?" Mr Lyons said.
"I think you have your head in the clouds if you were not concerned about your job at this time. People are looking at it and applying their own logic."
ALPA had been fielding many calls from worried members, but staff were maintaining high standards, and keeping planes flying safely and efficiently, he said.
Air NZ spokeswoman Rosie Flay acknowledged that some staff may be feeling nervous about the airline's future, but scotched suggestions of redundancy fever.
"We haven't had that response at all from our staff," she said. "Individuals may be feeling that themselves. It's a natural thing, because there has been a lot of turbulence in the airline.
"But the message from the airline is one of encouragement, and continuing on as normal."
Engineering, Printing and Manufacturing Union national secretary Andrew Little said that although staff were worried, there was no need for panic. "My advice is for people just to carry on as normal."
The ultimate solution lay with the Government and the shareholders, and members were simply doing their best to keep the airline functioning, Mr Little said.
But the Government refuses to blink as Air NZ's financial position continues to haemorrhage, sticking to what appears to be an increasingly untenable bail-out deal while due diligence is completed. That could take weeks.
National deputy leader Bill English said: "The Government has days – not weeks – to sort it out. That's probably a view that the shareholders, and the bankers, are coming to as well."
Prime Minister Helen Clark and Minister of Finance Michael Cullen are refusing to be drawn into speculation on Air NZ's future.
A spokesperson for Dr Cullen said: "It's a bitch of a story for you guys, but it's a bigger bitch for us, and he (Dr Cullen) is not going to feed it."
Christchurch aviation analyst Les Bloxham said statutory management appeared to be the most likely scenario.
This would allow Air NZ to continue trading under the control of a manager, while debts and claims against the company were frozen.
If the board sought the appointment of a statutory manager, the request would first go to the Securities Commission, New Zealand's securities watchdog, which would then make a recommendation to the Government.
"That's very much on the cards from what I have heard," he said.
Mr Bloxham said he had fielded many calls in the aviation industry from employees and former employees of the national carrier.
"I feel so sorry for the staff, who have basically given their lives, only to see things fall down in rubble all around them," he said. "There's a lot of sad people out there."
The Government has stepped in to cover Air NZ against acts of war and terrorism with a $US2 billion ($4.9b) indemnity.
Aviation insurance underwriters have given notice to cancel the war risk cover of all international carriers after September 12's terrorist attacks in the United States.
Insurers are renewing policies on new terms to provide limited war risk cover only to airlines considered a good risk, including Air NZ. But the airline's cover of liability to third parties for injury and property damage arising from war or terrorist activity still stood to be slashed from $US2b to $US50 million.
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For Air NZ up to date share price see the following link:
http://www.nzse.co.nz/market/price_by_stock/a.html
AIRVA and AIRVB.
http://www.nzse.co.nz/market/price_by_stock/a.html
AIRVA and AIRVB.
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So where's the official announcement?
How come the shares continue to be traded?
Who bought nearly $2m worth of AIRVB after trading opened this morning?
How come the shares continue to be traded?
Who bought nearly $2m worth of AIRVB after trading opened this morning?
Evertonian
Settle down Skol.
You might just want to think about what people are typing rather than assume anything. I know my post was sarcastic towards the Doctor & I think ANFO's was the same. Don't assume that everyone will be happy to see ANZ go down the tubes.
I have made a few points over the last year (and I'm not alone) in saying that ANZ's plight might be the lesson SQ wanted them to have after gazumping them on the AN deal. Remember, Asians have long memories.
I for one would not like to see anyone else go through whats happened at AN, especially in NZ (except for the real culprits)
You might just want to think about what people are typing rather than assume anything. I know my post was sarcastic towards the Doctor & I think ANFO's was the same. Don't assume that everyone will be happy to see ANZ go down the tubes.
I have made a few points over the last year (and I'm not alone) in saying that ANZ's plight might be the lesson SQ wanted them to have after gazumping them on the AN deal. Remember, Asians have long memories.
I for one would not like to see anyone else go through whats happened at AN, especially in NZ (except for the real culprits)
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Straight from the horse's mouth at these links:
1. Media releases: http://www.airnz.co.nz/mediacentre/p....jsp?pid=12001
2. Company updates: http://erequest.airnz.co.nz/airnz_update.htm
Kermie
1. Media releases: http://www.airnz.co.nz/mediacentre/p....jsp?pid=12001
2. Company updates: http://erequest.airnz.co.nz/airnz_update.htm
Kermie
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This is a post I have used on other forums.... but I think it is perhaps relevant on this thread, as news breaks over the Tasman. If you have read my ramblings please skip over to the next post.
********************************************
As most of us would remember, in late 1979 a DC10 aircraft operated by Air New Zealand impacted the lower slopes of Mt Erebus and gouged a crater, 4 metres deep and 600 metres long into the snow and ice. 257 souls perished in an instant. Now - 22 years later at approx. 2 AM eastern time last Fri. the 14th of September the Air New Zealand organization suffered yet another tragic accident (although I use the word accident advisedly). With the stroke of a pen 16,000 innocent persons had their lives changed forever. Ansett Airlines lay smoldering on the upper slopes of a mountain of greed and mismanagement. Perhaps greed is the wrong word because it implies an ability and a will, both of which the fools on the Air NZ do not posses – lets say stupidity and mismanagement.
It is a matter of public record that in 1979 the corporate culture of Air N.Z. committed huge resources to shift the blame for those 257 deaths onto the Aircrew through a process that included discrediting a royal commissioner, discrediting the crews initial training and those who conducted it, and astonishingly even breaking into of one crew member’s home in a vain attempt to gather discrediting personal evidence. MAKE NO MISTAKE!! This process is happening again. The corporate culture of 1979 is alive and well at Air New Zealand in 2001. The Air New Zealand board will use every resource at its disposal to shift the blame of this organizational accident onto the Australian government, the New Zealand government, Ansett middle management, Saudi oil interests, the Australian dollar, and quite possibly the hard working Ansett staff. This, from the people who after buying 50% of Ansett allowed News Corp. sole access to the management of the company and who didn’t even bother to carry out ‘due diligence’ for the purchase of the remaining 50% until AFTER they had paid News Corp. the inflated price.
I may receive some criticism for comparing the loss of lives with the loss of jobs, and of course this comparison should not be done. What I am suggesting is the parallels that can be drawn in the “corporate culture” that inextricably links the 2 events. I fear for the innocent workers at the coalface in New Zealand. Ample evidence is emerging that they may face a similar fate in the not to distant future. This further failure, I feel, is necessary for the industry. We do not need such a cowboy organization in our ranks… it can only eventually lead to more than “organizational” accidents. I refer here, of course to the leaders of Air NZ - the board. While I agree that the “cutting free” of Ansett by the Air New Zealand organization should be countered by a cutting of the anchor chain that holds their islands socially, and economically, to Australia's shirt tales, and stops them from floating into oblivion, please focus your rage on the true culprits. Culprits who, while America was being attacked live on television, attacked the aviation industry in this country by stealth before retreating to their corporate lair across the Tasman.
We have already witnessed on the Business Sunday programme in Australia (23/09/01)the most appalling form of buck passing from the gentleman in New Zealand who gives Farmers a bad name. This fool, who has been purported to be a business leader and who is apparently a Queens Counsel, would not even know what to do with a pair of Velcro gloves in his sad country.
While at Uni. in London last year it was suggested to my class, by persons of high standing in the aviation industry, that the future of our industry is an eventual structure comprising of 3 or 4 major organisations only. This restructuring of the industry was suggested as taking 10 - 15 years during which time smaller, less profitable, airlines would be forced out financially and the larger airlines would indulge in mega mergers. So far I have not seen any evidence to refute this concept and the events in recent weeks, around the world, simply make me think that this may indeed be the road that will be travelled - but in a much shorter time frame.
Seems our industry and our jobs may be very different animals in the not too distant future - I'm suggesting to my son he gets a trade under his belt before playing with aeroplanes!!
********************************************
As most of us would remember, in late 1979 a DC10 aircraft operated by Air New Zealand impacted the lower slopes of Mt Erebus and gouged a crater, 4 metres deep and 600 metres long into the snow and ice. 257 souls perished in an instant. Now - 22 years later at approx. 2 AM eastern time last Fri. the 14th of September the Air New Zealand organization suffered yet another tragic accident (although I use the word accident advisedly). With the stroke of a pen 16,000 innocent persons had their lives changed forever. Ansett Airlines lay smoldering on the upper slopes of a mountain of greed and mismanagement. Perhaps greed is the wrong word because it implies an ability and a will, both of which the fools on the Air NZ do not posses – lets say stupidity and mismanagement.
It is a matter of public record that in 1979 the corporate culture of Air N.Z. committed huge resources to shift the blame for those 257 deaths onto the Aircrew through a process that included discrediting a royal commissioner, discrediting the crews initial training and those who conducted it, and astonishingly even breaking into of one crew member’s home in a vain attempt to gather discrediting personal evidence. MAKE NO MISTAKE!! This process is happening again. The corporate culture of 1979 is alive and well at Air New Zealand in 2001. The Air New Zealand board will use every resource at its disposal to shift the blame of this organizational accident onto the Australian government, the New Zealand government, Ansett middle management, Saudi oil interests, the Australian dollar, and quite possibly the hard working Ansett staff. This, from the people who after buying 50% of Ansett allowed News Corp. sole access to the management of the company and who didn’t even bother to carry out ‘due diligence’ for the purchase of the remaining 50% until AFTER they had paid News Corp. the inflated price.
I may receive some criticism for comparing the loss of lives with the loss of jobs, and of course this comparison should not be done. What I am suggesting is the parallels that can be drawn in the “corporate culture” that inextricably links the 2 events. I fear for the innocent workers at the coalface in New Zealand. Ample evidence is emerging that they may face a similar fate in the not to distant future. This further failure, I feel, is necessary for the industry. We do not need such a cowboy organization in our ranks… it can only eventually lead to more than “organizational” accidents. I refer here, of course to the leaders of Air NZ - the board. While I agree that the “cutting free” of Ansett by the Air New Zealand organization should be countered by a cutting of the anchor chain that holds their islands socially, and economically, to Australia's shirt tales, and stops them from floating into oblivion, please focus your rage on the true culprits. Culprits who, while America was being attacked live on television, attacked the aviation industry in this country by stealth before retreating to their corporate lair across the Tasman.
We have already witnessed on the Business Sunday programme in Australia (23/09/01)the most appalling form of buck passing from the gentleman in New Zealand who gives Farmers a bad name. This fool, who has been purported to be a business leader and who is apparently a Queens Counsel, would not even know what to do with a pair of Velcro gloves in his sad country.
While at Uni. in London last year it was suggested to my class, by persons of high standing in the aviation industry, that the future of our industry is an eventual structure comprising of 3 or 4 major organisations only. This restructuring of the industry was suggested as taking 10 - 15 years during which time smaller, less profitable, airlines would be forced out financially and the larger airlines would indulge in mega mergers. So far I have not seen any evidence to refute this concept and the events in recent weeks, around the world, simply make me think that this may indeed be the road that will be travelled - but in a much shorter time frame.
Seems our industry and our jobs may be very different animals in the not too distant future - I'm suggesting to my son he gets a trade under his belt before playing with aeroplanes!!
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BUSINESS
TUESDAY, 25 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ shares bounce as calls made for disclosure
25 September 2001
Air New Zealand shares, which had a day from hell yesterday with a 40 percent plunge, rebounded around 18-22 percent when the sharemarket opened today.
The rebound came as pressure was increased for the company to disclose more information so investors could make more informed decisions.
The fall of the share price to the "penny dreadful" class has also called into question the viability of a rescue package from the Government and two major shareholders and increased the likelihood of statutory management.
Air NZ unrestricted B shares rose 3.5 cents, 22 percent, to 19c after they dropped 10.5c to 15.5c yesterday. The residents-only A shares rose 3c to 21c having plunged 11c to 18c.
The Securities Commission has asked for a copy of a report by the Stock Exchange's Market Surveillance Panel into Air New Zealand, the first ever such request.
The panel is looking into whether the beleaguered airline has been adequately informing the market about its financial position.
The share price rebound was in the context of a sharp rise of 1.75 percent in the overall market as Wall Street snapped a six day losing streak with the blue chip Dow Jones Industrial Average posting a 4.5 percent rise.
Forsyth Barr Frater Williams executive director Don Turkington said that investing in Air NZ was a gamble because there was a paucity of information and people were confused.
"That's why the share price went down yesterday and if a positive announcement came up it would go up," he said.
Market Surveillance Panel chairman Bill Falconer told National Radio today it was setting up a work programme with the company and considering the information it needed to look at.
"The market has received information from a variety of sources over recent months, none of it from the company.
"We are trying to get a handle on what is and has been in the market and whether or not ... that meets the disclosure requirements of the company under the Act," Mr Falconer said.
In hindsight, the problems of Air NZ subsidiary Ansett Australia may not have received the attention they deserved and more may have been "brewing" than had been disclosed, he said.
Air NZ put debt-ridden Ansett into voluntary administration just over a fortnight ago. The airline collapsed with the loss of 16,000 jobs.
Shareholders were entitled to know whether they were adequately informed and out of that would come lessons on what kind of continuous disclosure there would be in future, Mr Falconer said.
His comments were backed by ACT Party MP and former panel member, Stephen Franks who said even now Air NZ was failing to disclose necessary information.
"At the moment the market still doesn't have an authoritative statement on the real risk of Air New Zealand having to face Ansett Australia's liabilities."
The level of disclosure had been so poor that the Australian securities commission had said it was investigating. He said contingent liabilities towards Ansett were the most material issue "there should be a statement that gives a better fix"
"When you have the chairman of the company, confirmed by the minister of finance, both talking about major shareholders acting in interests other than the company, that's probably much more important to investors than any amount of past financial disclosure," Mr Franks told National Radio.
"If it's true that major shareholders may not have acted in the interests of the company and are being begged by the Government to stay in there, then that would be a signal for most people to get out."
If Air NZ was found to be in breach of disclosure regulations, the Market Surveillance Panel's remedies were limited to publicly announcing its findings and a public censure of Air NZ directors.
"We are working closely with the Securities Commission which has much wider powers than the Stock Exchange. We have undertaken to let them have the report when it's concluded to see whether they might take further action."
Any redress for shareholders would be a legal one.
Mr Falconer said the request by the Securities Commission for the report marked the gravity of the issues before the Market Surveillance Panel.
"The Securities Commission doesn't normally get involved in disclosure issues."
The report was expected to be completed within a fortnight.
TUESDAY, 25 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ shares bounce as calls made for disclosure
25 September 2001
Air New Zealand shares, which had a day from hell yesterday with a 40 percent plunge, rebounded around 18-22 percent when the sharemarket opened today.
The rebound came as pressure was increased for the company to disclose more information so investors could make more informed decisions.
The fall of the share price to the "penny dreadful" class has also called into question the viability of a rescue package from the Government and two major shareholders and increased the likelihood of statutory management.
Air NZ unrestricted B shares rose 3.5 cents, 22 percent, to 19c after they dropped 10.5c to 15.5c yesterday. The residents-only A shares rose 3c to 21c having plunged 11c to 18c.
The Securities Commission has asked for a copy of a report by the Stock Exchange's Market Surveillance Panel into Air New Zealand, the first ever such request.
The panel is looking into whether the beleaguered airline has been adequately informing the market about its financial position.
The share price rebound was in the context of a sharp rise of 1.75 percent in the overall market as Wall Street snapped a six day losing streak with the blue chip Dow Jones Industrial Average posting a 4.5 percent rise.
Forsyth Barr Frater Williams executive director Don Turkington said that investing in Air NZ was a gamble because there was a paucity of information and people were confused.
"That's why the share price went down yesterday and if a positive announcement came up it would go up," he said.
Market Surveillance Panel chairman Bill Falconer told National Radio today it was setting up a work programme with the company and considering the information it needed to look at.
"The market has received information from a variety of sources over recent months, none of it from the company.
"We are trying to get a handle on what is and has been in the market and whether or not ... that meets the disclosure requirements of the company under the Act," Mr Falconer said.
In hindsight, the problems of Air NZ subsidiary Ansett Australia may not have received the attention they deserved and more may have been "brewing" than had been disclosed, he said.
Air NZ put debt-ridden Ansett into voluntary administration just over a fortnight ago. The airline collapsed with the loss of 16,000 jobs.
Shareholders were entitled to know whether they were adequately informed and out of that would come lessons on what kind of continuous disclosure there would be in future, Mr Falconer said.
His comments were backed by ACT Party MP and former panel member, Stephen Franks who said even now Air NZ was failing to disclose necessary information.
"At the moment the market still doesn't have an authoritative statement on the real risk of Air New Zealand having to face Ansett Australia's liabilities."
The level of disclosure had been so poor that the Australian securities commission had said it was investigating. He said contingent liabilities towards Ansett were the most material issue "there should be a statement that gives a better fix"
"When you have the chairman of the company, confirmed by the minister of finance, both talking about major shareholders acting in interests other than the company, that's probably much more important to investors than any amount of past financial disclosure," Mr Franks told National Radio.
"If it's true that major shareholders may not have acted in the interests of the company and are being begged by the Government to stay in there, then that would be a signal for most people to get out."
If Air NZ was found to be in breach of disclosure regulations, the Market Surveillance Panel's remedies were limited to publicly announcing its findings and a public censure of Air NZ directors.
"We are working closely with the Securities Commission which has much wider powers than the Stock Exchange. We have undertaken to let them have the report when it's concluded to see whether they might take further action."
Any redress for shareholders would be a legal one.
Mr Falconer said the request by the Securities Commission for the report marked the gravity of the issues before the Market Surveillance Panel.
"The Securities Commission doesn't normally get involved in disclosure issues."
The report was expected to be completed within a fortnight.
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Barbers Pole
Yeah, I see that, more lives than a cat,
what did Helen say to cause the shares to
be suspended indefinatly this morning, as
reported on another post here?
Wirraway
Yeah, I see that, more lives than a cat,
what did Helen say to cause the shares to
be suspended indefinatly this morning, as
reported on another post here?
Wirraway
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26.09.2001
By FRAN O'SULLIVAN, VERNON SMALL and DANIEL RIORDAN
Prime Minister Helen Clark has advised investors to hold on to their shares amid reports that her office has tested market reaction to the Government's increasing its commitment to the multimillion-dollar bailout of Air New Zealand.
"I'd recommend they hang on to them, because I am absolutely convinced that Air New Zealand has a viable future," she said yesterday.
"I'm certainly getting tickets bought for me on Air New Zealand and I have every confidence it's going to be flying."
Helen Clark's "don't sell" warning reversed the precipitous slide in Air New Zealand's share prices, which fell by 40 per cent on Monday after she raised statutory management as a viable option for the troubled airline.
Those close to the deal have suggested that one option would involve the Government's buying out either of the two main shareholders, Singapore Airlines or Brierley Investments.
Yesterday, Air New Zealand shares gained 50 per cent as the Prime Minister issued her confident statement that the airline would survive, and news filtered into the market that the Government was thinking about strengthening its role in the proposed $850 million bailout.
The A shares, restricted to New Zealand shareholders, closed at 26c, up 8c. The internationally tradeable B shares closed at 24c, up 8.5c.
Under a plan formulated before the terrorist attacks in the United States sent international aviation markets into turmoil, Brierley Investments and Singapore Airlines were each to come up with $150 million and the Government was to provide a $550 million loan.
A highly placed broking source said a representative from Helen Clark's office had placed calls to several major broking houses wanting to know how the market would react to one of two actions by the Government: putting capital into the airline or underwriting a rights issue.
A spokesman for Helen Clark declined to put specific questions to her on the move, saying she would not comment on such issues.
But MacQuarie equities analyst Arthur Lim said he believed a rights issue would be better received by the market, because it gave existing shareholders the option of maintaining their relative stakes in Air New Zealand.
A capital injection at the present low share prices would severely dilute their holdings.
In the past four weeks, Air New Zealand has lost 90 per cent of its value.
This has put pressure on the Government, the airline's independent directors and its two major shareholders to come up with a viable rescue plan to avoid putting the airline into statutory management.
Government negotiator Rob Cameron was yesterday working with Singapore Airlines and Brierley Investments on a new recapitalisation plan to replace that announced on September 13.
Speculation suggests that Mr Cameron has tested a proposal for the Government to buy out either of the two Singapore-based companies if they oppose increasing their commitments to the bailout.
That option would allow the Government to acquire shares at a deeply discounted rate, and the shareholders a quick exit path.
Mr Cameron, together with Treasury solicitor Ivan Kwok and a team of officials, was working in Auckland last night on the rescue and was not available for comment.
But acting Air New Zealand chairman Jim Farmer, QC, said the parties were continuing to make satisfactory progress on their negotiations.
"While negotiations are not yet completed, the directors of Air New Zealand remain hopeful that a successful outcome will be achieved soon," Dr Farmer said.
Until last night there had been no sign of job problems at Air New Zealand, despite airlines around the world cutting staff after the terrorist attacks in the United States.
But an indication came when 48 Air NZ flight crew trainees were told there would be no work for them at the end of the course.
One of the three groups of 16 trainees on six-week intensive courses received the news yesterday, just hours before they were due to graduate.
nzherald.co.nz/aviation
Stock Exchange has taken exception to PM's comments and Air NZ shares ceased trading earlier this morning.
Statutory management seems inevitable after this latest news.
By FRAN O'SULLIVAN, VERNON SMALL and DANIEL RIORDAN
Prime Minister Helen Clark has advised investors to hold on to their shares amid reports that her office has tested market reaction to the Government's increasing its commitment to the multimillion-dollar bailout of Air New Zealand.
"I'd recommend they hang on to them, because I am absolutely convinced that Air New Zealand has a viable future," she said yesterday.
"I'm certainly getting tickets bought for me on Air New Zealand and I have every confidence it's going to be flying."
Helen Clark's "don't sell" warning reversed the precipitous slide in Air New Zealand's share prices, which fell by 40 per cent on Monday after she raised statutory management as a viable option for the troubled airline.
Those close to the deal have suggested that one option would involve the Government's buying out either of the two main shareholders, Singapore Airlines or Brierley Investments.
Yesterday, Air New Zealand shares gained 50 per cent as the Prime Minister issued her confident statement that the airline would survive, and news filtered into the market that the Government was thinking about strengthening its role in the proposed $850 million bailout.
The A shares, restricted to New Zealand shareholders, closed at 26c, up 8c. The internationally tradeable B shares closed at 24c, up 8.5c.
Under a plan formulated before the terrorist attacks in the United States sent international aviation markets into turmoil, Brierley Investments and Singapore Airlines were each to come up with $150 million and the Government was to provide a $550 million loan.
A highly placed broking source said a representative from Helen Clark's office had placed calls to several major broking houses wanting to know how the market would react to one of two actions by the Government: putting capital into the airline or underwriting a rights issue.
A spokesman for Helen Clark declined to put specific questions to her on the move, saying she would not comment on such issues.
But MacQuarie equities analyst Arthur Lim said he believed a rights issue would be better received by the market, because it gave existing shareholders the option of maintaining their relative stakes in Air New Zealand.
A capital injection at the present low share prices would severely dilute their holdings.
In the past four weeks, Air New Zealand has lost 90 per cent of its value.
This has put pressure on the Government, the airline's independent directors and its two major shareholders to come up with a viable rescue plan to avoid putting the airline into statutory management.
Government negotiator Rob Cameron was yesterday working with Singapore Airlines and Brierley Investments on a new recapitalisation plan to replace that announced on September 13.
Speculation suggests that Mr Cameron has tested a proposal for the Government to buy out either of the two Singapore-based companies if they oppose increasing their commitments to the bailout.
That option would allow the Government to acquire shares at a deeply discounted rate, and the shareholders a quick exit path.
Mr Cameron, together with Treasury solicitor Ivan Kwok and a team of officials, was working in Auckland last night on the rescue and was not available for comment.
But acting Air New Zealand chairman Jim Farmer, QC, said the parties were continuing to make satisfactory progress on their negotiations.
"While negotiations are not yet completed, the directors of Air New Zealand remain hopeful that a successful outcome will be achieved soon," Dr Farmer said.
Until last night there had been no sign of job problems at Air New Zealand, despite airlines around the world cutting staff after the terrorist attacks in the United States.
But an indication came when 48 Air NZ flight crew trainees were told there would be no work for them at the end of the course.
One of the three groups of 16 trainees on six-week intensive courses received the news yesterday, just hours before they were due to graduate.
nzherald.co.nz/aviation
Stock Exchange has taken exception to PM's comments and Air NZ shares ceased trading earlier this morning.
Statutory management seems inevitable after this latest news.
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Good luck to the 48 trainees. Hope something good comes of your newly aquired endorsements. You could be ahead of 100's on the employment lines, aviation is in for some interesting times. You might not think it now, it could be the start of something big for you all. Good luck form "over the ditch".
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Unfortunately I'm not at home so I don't have the luxury of reading the newspapers! What's the latest with ANZ? Are they in receivership (or Stat admin?)? Are there expected to be routes cut or job losses?
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This is the latest this morning from the New Zealand press.
If you have Internet access, which I take it you have to access PPRuNe?, go to
http://www.stuff.co.nz
BUSINESS
SUNDAY, 30 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ share trading suspended indefinitely
29 September 2001
Shares in Air New Zealand have been suspended indefinitely at the airline's request.
This follows the stock exchange calling for a halt in trading yesterday - the second in a week - to clarify comments from Brierley chief executive Greg Terry. Brierley is a major stakeholder.
After a week where share prices fluctuated wildly amid conflicting reports about the negotiations to recapitalise the ailing airline, Air NZ reacted yesterday by asking the exchange's market surveillance panel to "suspend the company's shares in the best interests of the market".
The request added that the suspension in trading would continue until there was a "comprehensive announcement" regarding Air NZ's future.
And, while the panel will reconsider the trading suspension on Monday, it has indicated that shares will remain in limbo until the rescue package is finalised.
The initial rescue package features a $550 million government loan and a $300 million cash injection from major stakeholders Singapore Airlines and Brierley Investments. However, with the share price plunging since the package was announced, pundits claim more finance is required.
Acting Air NZ chairman Jim Farmer QC acknowledged market anxiety about obtaining information regarding the steps required to save the airline.
"That (providing quality information) remains the objective of current discussions, but those discussions could themselves be prejudiced by premature, incomplete disclosure," Dr Farmer said.
Discussions were expected to continue over the weekend and would have to be completed before any announcements were made, he said.
"This (the issuing of details of the rescue plan) is expected to be early next week," Dr Farmer said.
A spokesman for Prime Minister Helen Clark also poured cold water on the possibility of the rescue plan being announced this weekend.
"At this stage talks are continuing and are set to go on into next week," he said.
Dr Farmer also took issue with media reports claiming Air NZ had failed to repay an ANZ bank loan.
"The facts are the loan was replaced by a new loan facility, agreed with ANZ, and none of the company's lenders have recalled any of their loans," he said.
If you have Internet access, which I take it you have to access PPRuNe?, go to
http://www.stuff.co.nz
BUSINESS
SUNDAY, 30 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ share trading suspended indefinitely
29 September 2001
Shares in Air New Zealand have been suspended indefinitely at the airline's request.
This follows the stock exchange calling for a halt in trading yesterday - the second in a week - to clarify comments from Brierley chief executive Greg Terry. Brierley is a major stakeholder.
After a week where share prices fluctuated wildly amid conflicting reports about the negotiations to recapitalise the ailing airline, Air NZ reacted yesterday by asking the exchange's market surveillance panel to "suspend the company's shares in the best interests of the market".
The request added that the suspension in trading would continue until there was a "comprehensive announcement" regarding Air NZ's future.
And, while the panel will reconsider the trading suspension on Monday, it has indicated that shares will remain in limbo until the rescue package is finalised.
The initial rescue package features a $550 million government loan and a $300 million cash injection from major stakeholders Singapore Airlines and Brierley Investments. However, with the share price plunging since the package was announced, pundits claim more finance is required.
Acting Air NZ chairman Jim Farmer QC acknowledged market anxiety about obtaining information regarding the steps required to save the airline.
"That (providing quality information) remains the objective of current discussions, but those discussions could themselves be prejudiced by premature, incomplete disclosure," Dr Farmer said.
Discussions were expected to continue over the weekend and would have to be completed before any announcements were made, he said.
"This (the issuing of details of the rescue plan) is expected to be early next week," Dr Farmer said.
A spokesman for Prime Minister Helen Clark also poured cold water on the possibility of the rescue plan being announced this weekend.
"At this stage talks are continuing and are set to go on into next week," he said.
Dr Farmer also took issue with media reports claiming Air NZ had failed to repay an ANZ bank loan.
"The facts are the loan was replaced by a new loan facility, agreed with ANZ, and none of the company's lenders have recalled any of their loans," he said.