Voter support spares Air NZ a buyback

Air New Zealand shareholders have overwhelmingly opted to approve the $4 billion purchase of new planes - and have spared the company the administrative hassle of a major share buyback.

The national carrier said yesterday that more than 99 per cent of its shareholders voted in favour of the purchase of additional Boeing aircraft.

New company law required the airline to seek 75 per cent shareholder approval for the purchase of long-haul aircraft with a value that had exceeded the company's capital.

With the Government owning 80 per cent of the airline the outcome of the vote - at last Friday's annual meeting - was never in doubt.

But the law requires that shareholders who vote "no" to the purchase have the right to sell their shares back to the company.

That sparked the interest of arbitrage players who were picking that the buyback price would be set by an independent valuer and may be at a significant premium to the current market value.

Analyst valuations on Air NZ range from $2.75 to $2.21.

But it appears the airline's long-term prospects were good enough to ensure that no major institutional shareholders opted to take advantage of the loophole.

In the end, 99.93 per cent of votes cast by 1147 shareholders approved the purchase of the planes. Just 0.07 per cent voted against. Thirty-eight shareholders abstained.

Shares in Air NZ closed down 5c at $2.40.