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Published on : Friday, November 15, 2013
Air New Zealand currently holds 22.9% of Virgin Australia shares and has regulatory approval in Australia to increase that to 25.99%. The Company will take up its full pro rata entitlement under the rights issue and sub-underwrite the issue together with the other major shareholders, Singapore Airlines and Etihad Airways. In the event that additional shares are available from the underwriting, Air New Zealand’s shareholding could increase to as much as 25.5%.
The additional investment by Air New Zealand of between A$81 million and A$116 million will strengthen the Virgin Australia balance sheet and enable the continuation of its strategy as it enhances its market position and improves business performance following a period of substantial change and growth. The completion of the rights issue will result in the termination of the undrawn shareholder term loan facility of A$38 million from Air New Zealand.
Air New Zealand Chief Executive Officer Christopher Luxon says, “Air New Zealand welcomes and supports this initiative by the Virgin Australia board and executive. We have been impressed by the ability of Virgin and its executive team to quickly and successfully undertake a major strategy shift to become a much more effective competitor. We have endorsed that strategy from the time of our initial investment in 2011.”
Source:- Air New Zealand