Government to sell 20% stake in Air New Zealand

Air New plane in the air The New Zealand government became a majority shareholder in the airline in 2002.

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New Zealand's government is to sell a 20% stake in national carrier Air New Zealand, leaving it with a 53% holding.

Trading in the airline's shares was halted on Monday following the government's announcement.

Based on the last trading price of NZ$1.65 per share, the 20% stake is valued at 363 million New Zealand dollars ($302m; £187m).

The sale will help the government's target of raising NZ$5bn to trim public debt and spend on infrastructure.

The Air New Zealand stake sale is part of a programme of asset sales by New Zealand's government, which has so far raised NZ$3.6bn.

Those funds came from the sale of government stakes in power companies Meridian Energy and Mighty River Power. Another stake sale, in power company Genesis Energy, is scheduled for next year.

As the government will retain a 53% stake in Air New Zealand after the sale, it will still have the power to appoint the majority of the airline's board of directors.

The New Zealand government became a majority shareholder in Air New Zealand in 2002, when it stepped in to save the carrier from collapse.

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