Air NZ shares resume trading

Trading in Air New Zealand shares has resumed after being suspended before the New Zealand Stock Exchange opened this morning.

Brokers said the suspension followed comments from Prime Minister Helen Clark yesterday which advised investors to hold on to their shares.

"I'd recommend they hang on to them, because I am absolutely convinced that Air NZ has a viable future," she said.

A New Zealand Stock Exchange spokesperson said this morning that the halt on trading would remain until the reported comments made by the Prime Minister had been clarified.

Helen Clark has so far refused to comment.

National's Transport spokesperson Belinda Vernon said the Prime Minister's comments were "totally irresponsible".

"After talking down the shares on Monday saying statutory management was a viable option, she then talked them up by urging investors to 'hang on' to shares. This is erratic and irresponsible behaviour," Ms Vernon said in a statement.

ACT leader Richard Prebble said the only credible way of interpreting Helen Clark's comments was that the Government had rejected putting the airline into statutory management and "decided instead to issue a blank cheque".

Meanwhile, Finance Minister Michael Cullen has blamed the media for the Stock Exchange's decision.

After an all-day caucus meeting at Premier House today, Dr Cullen told reporters the media had asked silly questions and needed to think very carefully about how they wrote stories about Air New Zealand.

He said Miss Clark had not been indicating that the Government was prepared to underwrite the airline, but was speaking more generally.

Dr Cullen has also denied reports today that the Prime Minister's office has tested market reaction to the Government increasing its commitment to the multimillion-dollar bailout of Air NZ.

Air NZ shares yesterday bounced back from speculation that the airline was heading for statutory management, with its A shares closing up 50 per cent to 27 cents.

Unrestricted B shares rose 61 per cent to 25c.

Broker Richard Burton of Forsyth Barr Frater Williams said the market was obviously starting to take the view that Air NZ would survive.

But that was cold comfort for many shareholders who in the past four weeks have seen Air New Zealand lose 90 per cent of its value.

Today's action followed reports that the Government could buy out either of the two main shareholders, Singapore Airlines or Brierley Investments.

One source said the Prime Minister's office had been making inquiries as to how the market would react to one of two actions by the Government - putting capital into the airline or underwriting a rights issue.

MacQuarie equities analyst Arthur Lim said last night 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 NZ.

A capital injection at the current low share prices would severely dilute their holdings.

- NZPA, HERALD STAFF

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