• a $1.2 billion pro rata renounceable Rights Offer, allowing eligible shareholders an opportunity to buy additional shares in Air New Zealand at a discount to the prevailing share price. The Government, which owns 51 per cent of Air NZ, will participate in the Rights Offer to retain its shareholding.
• a $600 million issuance of redeemable shares to the Crown, of which approximately $400 million is intended to be refinanced through an approximately $600 million debt issue, and
• a new $400 million Crown loan to replace the existing Crown loan facility, which is available to the airline through to January 2026.
"While there will still be bumpy skies ahead over the next few years, the moment is right for Air New Zealand to raise equity, recapitalise its balance sheet and repay the loan it received from the Crown during the Covid crisis. This is an important step in refuelling for our recovery," Walsh said tonight.
"Covid isn't behind us yet. There will still be significant challenges and uncertainties to face, and it will take time to recover, but Air New Zealand is committed to rebuilding a stronger, more nimble airline that delivers for all New Zealanders".
Air New Zealand chief executive Greg Foran said: "This is an important next step, as we are preparing to return to key international destinations, welcome international visitors back to New Zealand and launch a new service to New York.
"The last two years haven't been easy for our shareholders with the suspension of our dividend payments since 2020 and the decrease in equity reserves. Our shareholders have been top of mind as we took action to help mitigate the impact of the pandemic while positioning the airline to survive, then revive and finally thrive in the years to come.
"We're now focused on growing our domestic network, optimising our international routes and streamlining our fleet to more efficient and sustainable aircraft. And we're developing more benefits and value for our millions of Airpoints members.
"Our Kia Mau strategy sets a clear flight path for the coming years and while there will always be significant risks for the airline, importantly, our recapitalisation plan will help position us to thrive again", Foran said.
Under the $1.2 billion rights offer, shareholders - which include retail investors through online platform Sharesies - will be offered two new shares for every one share they own in Air New Zealand at an offer price of NZ$0.53 per share.
Those shareholders who take up their full entitlement will also be able to apply for additional shares in a "shortfall bookbuild process".
Shareholders who choose not to participate have the option of selling some or all of their rights on the NZX or, if they do nothing, they may receive some value through the shortfall bookbuild process, if the price determined in the shortfall bookbuild process exceeds the offer price.
The rights offer will open from Wednesday, April 6 and close on Monday, May 2. 2022.
It is open to eligible Air New Zealand shareholders on the airline's share register as at 7pm (NZT) on Tuesday, April 5 who are located in New Zealand and Australia and a "limited number of other jurisdictions".
Air New Zealand's shares last traded at $1.37 before being placed in a trading halt ahead of tonight's announcement.
Finance Minister Grant Robertson said the Government would continue to support the national carrier.
"We are continuing to invest in Air New Zealand and provide stability and certainty as the airline positions itself for recovery and resume services to key international tourism markets and develop new destinations like New York," he said.
"The Crown has pre-committed to participating in the $1.2 billion equity capital raise by purchasing the number of new shares necessary to retain its 51 per cent holding, which is worth up to $602 million. A portion of the capital raised will be used to repay loans it received from the Government during the pandemic.
"It has been an incredibly challenging time for Air New Zealand over the past two years. We have provided significant support to Air New Zealand to recognise its critical role in keeping the country connected to the rest of the world, including the Crown loan facility which has been drawn down by $850 million.
Earlier: Air NZ announced trading halt
The airline said earlier that the trading halt will remain in place until the sharemarket opens tomorrow.
Shares were trading at $1.38, down nearly 2 per cent before this afternoon's announcement.
The airline said in February the much-delayed announcement was scheduled for around the end of this month, depending on market conditions.
The easing of border restrictions by the Government - Air New Zealand's 52 per cent owner - have been critical in improving the outlook for the airline although competitors also benefit from the move.
Although oil prices have spiked due to the Ukraine invasion they have settled back but at elevated levels.
Air New Zealand plunged to a pre-tax loss of $376 million for the first half of this year and it warned losses will exceed $800m for the full year.
Shareholding minister Grant Robertson has indicated the Government will participate in the raise to maintain its shareholding.
The Government owns 51.9 per cent of Air NZ while institutional shareholders own 11.6 per cent. The next largest shareholder base is held by retail clients of Sharesies who collectively own nearly 6.2 per cent.
Last August he told the airline he didn't believe the current environment was sufficiently certain and stable to enable the Crown to provide a firm pre-commitment to support the planned equity raise then.
The capital raise had been deferred several times.
