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  • AIR2.495

    $0.1154.61%

  • Open 2.61 High 2.62 Low 2.48 Bid Price 2.485

    Offer Price 2.495 Value 5794340.4 Volume 2284993

Current as of 04/05/16 04:19PM NZST
Money Editor for NZ Herald

Air NZ asset sale will be more successful - analyst

Air New Zealand's share sell-down may come at a slight discount, an analyst predicts. Photo / NZ Herald
Air New Zealand's share sell-down may come at a slight discount, an analyst predicts. Photo / NZ Herald

The Government's Air New Zealand share sell-down is likely to be priced at a small discount to its share price because of the demand for it, says an analyst.

William Curtayne, a fund manager at Milford Asset Management, said the deal could be priced at around $1.60 per share - a 4 per cent discount to last night's $1.67 closing price.

"It's likely to get reasonable demand from New Zealand institutions," he said.

Curtayne also expected there to be off-shore interest in the company, particularly from Australian institutional investors given Air New Zealand's strong performance compare to rival airline Qantas.

Curtayne predicted the Air New Zealand share sell-down would do better than the Meridian Energy and Mighty River Power floats because the company was a growth business and both New Zealand and the global economy were heading into a period of growth.

"It's a cyclical asset in the right place in its cycle."

However, he said Air New Zealand was also highly risky as its performance could be impacted by a variety of factors including oil prices, currency changes and capacity issues caused by competing airlines.

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