Air New Zealand shares crashed yesterday, down 12c to $2.05, a drop of 5.5%, the result of concerns that Qantas would be dumping in the market its newly increased shareholding in Air New Zealand.
Qantas had become Air New Zealand’s second-largest shareholder after the New Zealand Government as the failed trans-Tasman merger agreements, which originally allowed for Qantas taking a 22% shareholding came to an end, with Qantas now owing $91.4 million shares or 4.2% of Air New Zealand.
How this interesting scenario came about was that Qantas was to have taken a 22% shareholding in Air NZ and as a precursor for that deal, in 2002 paid $98 million for redeemable preference shares prior to taking the bigger stake conditional on regulatory approval, which was not granted.
With the agreement being formally scrapped yesterday Qantas then redeemed the preference shares.
It is considered high unlikely that Qantas will hold on to the Air New Zealand shares and they are more likely to be disposed of sell the stake, particularly as part of the cash acquisition drive of potential new owners APA, should their deal go through.
Report by The Mole
