Why is this process happening so quickly? - This sale doesn't take as long as the other partial privatisations of state owned energy companies such as Mighty River and Meridian, because it is already listed on the stock exchange. This means it isn't raising any new money, so doesn't need to issue a prospectus. In this case one shareholder - the Government - is simply selling down part of its holding.
What is a bookbuild? - Sharebrokers and institutional investors - including those who manage KiwiSaver funds - will be invited to take part in this bookbuild process - where they are asked to say how many shares they want to buy and at what price. At the end of the process the Govt will set the price it wants to sell at and will sell the shares to these organisations. They will then sell them onto their clients. These clients include smaller investors.
Who is going to be allowed to buy the shares? - The Government says it will be using the bookbuild process to ensure that most of the shares being sold will go to NZers. It will do this by putting a condition on the sharebrokers taking part - that shares can be allocated only to clients who are NZers. (This means they have a NZ tax number, an NZ bank account and an NZ address.)
Will these shares stay in NZ ownership? - There's no guarantee they will stay in NZ hands. Shareholders are free to sell to whoever they want.
How can I buy the shares? - Any sharebroker or authorised financial adviser should be able to help buy the shares the Government is selling. Anyone can wait until the shares resume trading and buy them on the NZX then.
Why does the Govt say it will retain control of the airline?- Because it will still own 53 per cent of the shares and so will have the power to appoint the majority of directors to the board and control its direction.
Is the airline profitable?- It's doing pretty well, with a $182m profit for the 21 months to the end of June - up 156pc on the year before.
What happened in 2002 to Air NZ?- The then fully privatised airline came to the brink of collapse, after its Ansett unit in Australia shut down. The Government stepped in and recapitalised it to the tune of $885m. This is how the Government ended up being the majority shareholder.
What sort of a difference will this make to the running of the airline?- The Government says this should make little difference - that it is already in control of the airline through its majority share ownership and it will remain in such a controlling position. Opponents of the sale say it will mean a stronger profit objective at the airline, putting regional routes and the promotion of NZ tourism at risk.
What kind of price is the Govt likely to get for the shares?- - This is what the bookbuild will determine. Brokers are reporting strong demand, so the price is likely to be close to what they last traded at - namely $1.65 each. This would mean the Government would get close to $400m. Shares sold in this fashion usually sell at a discount to the market price when they were last traded.
How risky is this kind of investment?- Airline shares have been notoriously volatile as an investment over the years. Airlines can be hit hard by events outside their control, such as oil prices, pandemics and currency fluctuations.
Can't another airline just buy up all the shares? Other airlines or aviation groups have to get permission from the Minister of Transport before buying even a single Air NZ share.