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Initial confusion reinforces need for caution on Air NZ's $1.2b plan - regulator

Stock market regulator NZ RegCo is urging investors to get professional advice if they are considering taking part in Air New Zealand's capital raising and trading in rights to new shares.

Air New Zealand plane.
Photo: 123RF

Confusion was caused when the exchange operator, NZX, put up the wrong reference or theoretical starting prices for the ordinary Air New Zealand shares and for the tradeable rights to buy new shares.

NZX apologised for the mistakes and inconvenience caused. Air New Zealand ordinary shares traded but the rights did not, while the confusion and mistakes were sorted out.

NZRegCo, which operates independently of the NZX, said investors should look at the key information on the structure of the Air New Zealand offer.

"NZ RegCo considers that information may not have been accessed and considered by some investors," it said in a statement.

It said important details were included in materials issued by Air New Zealand, which investors were encouraged to review before making any investment.

"Investors are strongly encouraged to access and read that information, and seek professional advice, before making any investment decision regarding the AIR rights offer."

Under the rights offer, eligible shareholders receive one renounceable right for every one existing Air New Zealand share. That right entitles them to buy two new airline shares at 53 cents each, which will raise $1.2 billion for the airline.

The rights, which were given a confirmed reference price of 49 cents each yesterday, were quoted with buyers ready to pay 65 cents each while sellers were looking for just under 88 cents. No deals had been done in early market trading.

Ordinary Air New Zealand shares were up 5 percent at 95 cents each in early trading, indicating a measure of investor optimism.