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Air New Zealand rights offer

Air New Zealand (NZX: AIR; ASX: AIZ) announced a renounceable rights offer—learn more about the offer and how to take part through Sharesies.

What’s happening?

Air New Zealand Limited (NZX: AIR; ASX: AIZ), the flag carrier airline of New Zealand, announced a 2-for-1 renounceable rights offer to raise $1.2 billion NZD. 

A rights offer is one way that a company raises capital (cash). It gives existing shareholders the opportunity to buy more shares in the company—usually at a discounted price—and in proportion to the amount of shares they already own.

When a rights offer is ‘renounceable’, it means that you can sell your rights to someone else who can use those rights to buy the shares you’re entitled to.

It’s raising the money to repay its existing Crown loan, strengthen its balance sheet, improve liquidity, and help position itself for recovery.

Shareholders in AIR (NZX) were allocated 1 right for every 1 AIR share they held at 7 PM (NZST) on 5 April 2022. Each right entitled them to buy 2 new shares in AIR for $0.53 NZD per share. That meant for every right they exercised, they paid a total of $1.06 NZD. These rights were tradeable on the New Zealand Stock Exchange (NZX) until 26 April 2022.

Similarly, shareholders in AIZ (ASX) were allocated 1 right for every 1 AIZ share they held at 7 PM (NZST) on 5 April 2022. Each right entitled them to buy 2 new shares in AIZ for $0.49 AUD per share. That meant for every right they exercised, they paid a total of $0.98 AUD. These rights weren’t tradeable on the Australian Securities Exchange (ASX).

Applications to exercise rights closed on Sharesies at 8 PM on Sunday 1 May 2022. 

Any new shares not taken up through the rights offer will be sold through a shortfall bookbuild. Eligible investors can apply to take part in this offer through Sharesies until 8 PM (NZST) Tuesday 3 May 2022. The shortfall bookbuild could be scaled.

To learn more about the offer, check out:

And for some things to consider before taking part in a rights issue, check out:

If you held shares in Air New Zealand at 7 PM (NZST) on 5 April 2022, you were eligible to be allocated rights as part of this rights offer. 

You’ll need to be located in/have a registered address in New Zealand or Australia to take part. You can’t take part if you’re based outside of New Zealand or Australia.

A heads-up that due to exchange settlement times, 1 April 2022 was the last day you could buy Air New Zealand shares through Sharesies and be eligible to be allocated rights.

How to take part

Air New Zealand’s rights offer has now closed and applications for the shortfall offer close at 8 PM (NZST) Tuesday 3 May 2022. Check out the following to learn more about what happens next.

I exercised all of my rights

If you exercised all of the rights you were allocated (or bought) before Sunday 1 May 2022, your new shares should appear in your Portfolio by Tuesday 10 May 2022. Until then, your application to exercise rights will appear as pending in your Portfolio.

You may still apply for additional shares through the general shortfall offer until 8 PM on Tuesday 3 May 2022.

I exercised some of my rights

If you exercised some (but not all) of the rights you were allocated (or bought) before Sunday 1 May 2022, your new shares should appear in your Portfolio by Tuesday 10 May 2022. Until then, your application to exercise rights will appear as pending in your Portfolio.

For any rights you didn’t exercise before Sunday 1 May 2022 (or sell before Tuesday 26 April 2022), the allocation of shares you were entitled to will become available for other investors to buy in the shortfall bookbuild.

Your rights will still appear in your Portfolio until any potential premiums from the shortfall bookbuild are paid out by Air New Zealand, however you won’t be able to do anything with them. 

You may still apply for additional shares through the general shortfall offer until 8 PM on Tuesday 3 May 2022.

I didn’t exercise any of my rights

If you didn’t exercise your rights before Sunday 1 May 2022 (or sell your rights before Tuesday 26 April 2022), the allocation of shares you were entitled to will become available for other investors to buy in the shortfall bookbuild. 

Your rights will still appear in your Portfolio until any potential premiums from the shortfall bookbuild are paid out by Air New Zealand—you won’t be able to do anything with them in the meantime. 

You may still apply for additional shares through the general shortfall offer until 8 PM on Tuesday 3 May 2022.

Shortfall bookbuild

The shortfall bookbuild gives investors the opportunity to apply to buy Air New Zealand shares that weren’t taken up through the rights offer. 

It’s open to all Sharesies investors and could be scaled—this means if there’s more interest in the shortfall bookbuild than shares available, you may receive fewer or none of the shares that you apply for.

The price of Air New Zealand shares through the shortfall bookbuild will be determined by a book building approach and will be equal to or above $0.53 NZD per share for AIR shares.

The shortfall bookbuild is made up of two separate offers—the investor shortfall offer and the general shortfall offer. The investor shortfall offer closed on Sunday 1 May 2022.

General shortfall offer

This offer is open to all investors on Sharesies.

The price for the general shortfall offer may be higher or lower than the price that shares are trading at on the NZX.

To apply, search for ‘Air New Zealand’ in Sharesies, choose the NZX-listed shares, and select ‘Buy’. Your application will be for AIR shares in NZD. You’ll need to give the highest price you’re willing to pay per share, and choose the maximum amount of money to spend. You’ll need to have enough money in your Wallet at the time of your application.

Applications for the general shortfall offer close at 8 PM (NZST) Tuesday 3 May 2022. You may cancel your application up until then.

If you’ve applied to take part in the general shortfall offer (or the investor shortfall offer), we’ll be in touch with more info soon.

Offer period on Sharesies

Investor shortfall offer — Wednesday 6 April 2022 to Sunday 1 May 2022

General shortfall offer — Wednesday 6 April 2022 to Tuesday 3 May 2022

Fees

You won’t be charged the Sharesies transaction fee to buy shares through the shortfall bookbuild, but you may be charged currency exchange fees.

Before taking part

All investing involves risk—you aren’t guaranteed to make money, and you might lose the money you start with. Air New Zealand has summarised the risks they consider relevant to this offer in the investor presentation and the offer document.

We encourage you to do your due diligence, consider the risks involved, and speak to a financial adviser if you need help deciding whether to take part.

Key dates

Applications for general shortfall offer close through Sharesies on Tuesday 3 May 2022. Air New Zealand expected to allocate new shares on Monday 9 May 2022. New shares expected to start trading on the NZX and ASX on Monday 9 May 2022.
Sharesies is not responsible for the offer and Sharesies can’t offer any financial advice on whether or not you should take part in this offer.
When taking part through Sharesies, the Sharesies General Terms and Conditions apply (with necessary changes to accommodate this rights offer) and the definition of shares extends to rights. Fees may apply for use of the platform provided by Sharesies Limited. Sharesies will be paid a fee from Air New Zealand for distributing this offer to Sharesies investors. 
The information provided is not financial advice and has been prepared without taking into account your objectives, financial situation, or needs. Speak to a licensed financial advice provider for advice specific to your circumstances.
If you have any questions, get in touch at help@sharesies.co.nz.