Air New Zealand Offloads 20% Stake in Virgin Australia
June 14, 2016
On 13th June 2016, Air New Zealand announced it has reached an agreement for the sale of 20% of its shareholding stake in Virgin Australia. The stake has sold to the Nanshan Group of China for $193 million. According to an article published at AeroSpace-Technology.com, the share sale deal is awaiting the approval of government regulators in China. It will also see the Airline relinquish much of the stake it holds in the Australian company. Before the sale, Air New Zealand held a 25.9% shareholding stake in Virgin Air. The airline hinted it was considering ridding itself of the remaining 5.9% shares as well.
Successful Share Negotiations
The top management at Air New Zealand hailed the successful share sale negations with Nanshan Group. The AeroSpace-Technology.com website quotes Tony Carter, the Air New Zealand Chairman:
“The sale will allow Air New Zealand to focus on its own growth opportunities while still continuing its long-standing alliance with virgin Australia on the trans-tasman network.”
Notably, the sale of Air New Zealand’s stake has nothing to do with market panic or strained relations with Virgin Australia. It is instead a strategic move that was designed to free up financial resources. In the hope they can be used for investment in other priority markets. Virgin Australia continues to maintain sound financial and operational conditions. Something that will be beneficial to the Nanshan Group as well. The company’s statement says:
“We look forward to meeting with Nanshan Group over the coming weeks to discuss the proposed acquisition.”
High-Profile Investors for Air New Zealand
Virgin Australia still boasts a portfolio of high-profile investors, of course. These include Singapore Airlines and Etihad Airways. The Foreign Investment Review Board of Australia recently approved Singapore Airlines’ plans. These plans include expanding its stake in Virgin Australia to 25.9%. Etihad Airways holds a 25.1% stake in Virgin Australia. While the China-based HNA Group is on course to acquiring the airline’s 13% stake worth $114 million. These positive developments are not only improving Virgin Australia’s profile in the staff recruitment markets but are also accelerating its plans to begin direct flights to China.