Air NZ updates on capital raise timing and liquidity

Stock exchange listings: New Zealand (NZX: AIR) / Australia (ASX: AIZ) / ADR (OTC: ANZLY)


MARKET ANNOUNCEMENT

Air New Zealand postal address: Private Bag 92007, Auckland, 1142, New Zealand
Investor Relations email: investor@airnz.co.nz
Investor website: www.airnewzealand.co.nz/investor


13 August 2021

Air New Zealand updates on capital raise timing and liquidity

Background
On 9 April 2021 Air New Zealand announced its intention to complete a capital raise, with
components of both debt and equity, before 30 September 2021.
Yesterday, the Government provided its plan to reconnect New Zealanders to the world in relation
to COVID-19. This included updated vaccination rollout plans, a phased approach to reopening
borders and from the first quarter of calendar 2022, a phased introduction of an individual risk-
based approach to border settings that will establish various pathways of entry into the country.
Capital raise deferral
Subsequently, the Company received a letter from the Minister of Finance outlining his view that
the current environment is not sufficiently certain and stable to enable the Crown to provide a firm
pre-commitment to support the planned equity raise at this time. A copy of that letter is enclosed
with this release.
In this context, the Company has, in consultation with the Crown, decided to further defer its
planned capital raise until the first available window in the first quarter of calendar year 2022.
Given the critical role that the airline has in New Zealand’s economy and society, the Crown has
again confirmed its longstanding commitment to maintaining a majority shareholding in Air New
Zealand. Subject to Cabinet being satisfied with the terms of the Company’s proposed capital
raise at the relevant time, the Crown has again confirmed that it will participate in an equity capital
raise by purchasing the number of new shares necessary to maintain a majority shareholding.
On completion of the recapitalisation, the Company expects to repay all amounts drawn under the
Crown Standby Facility. The Crown has confirmed to the Company that it shares this expectation.
Crown Standby Facility
The interest rates on drawings under Tranches 1 and 2 of the Crown Standby Facility were due to
step up by 1% after 29 October 2021. The Company and the Minister of Finance have agreed that
this interest rate step up will no longer apply.
This means that from 29 October 2021 the margin applicable to drawings under Tranche 1 will
remain at 2.50% and for Tranche 2 will remain at 4.00%. The line fee payable on the Crown
Standby Facility will remain at 1.00%. This will result in an all-in total interest rate of approximately

Stock exchange listings: New Zealand (NZX: AIR) / Australia (ASX: AIZ) / ADR (OTC: ANZLY)


MARKET ANNOUNCEMENT

Air New Zealand postal address: Private Bag 92007, Auckland, 1142, New Zealand
Investor Relations email: investor@airnz.co.nz
Investor website: www.airnewzealand.co.nz/investor


4.20% for Tranche 1 and 5.70% for Tranche 2 (incorporating the same Bank Bill Benchmark rate
of around 0.70%).
This change has been negotiated on an arm’s length basis with each party having been
independently advised.
The Crown Standby Facility continues to be available through to September 2023. Other
commercial terms of the Crown Facility remain as outlined in the Company’s announcements on
20 March 2020 and 8 April 2021.
Liquidity update
As communicated in the Company’s latest market announcement on 4 August 2021, the Company
expects to draw down further on the Crown Standby Facility. This reflects the cashflow impact of
the suspension of the trans-Tasman bubble, combined with upcoming planned payments relating
to aircraft.
Given the ongoing uncertainty in the operating environment, on 6 April 2021 the Company
suspended its cash burn guidance. While uncertainty continues to exist and the cash burn
guidance remains suspended, the Company notes that repayment of approximately $310 million
related to PAYE payment deferrals from the IRD is now expected to occur over the three months
from January to March 2022.
Dame Therese Walsh
Chairman

Ends.
Leila Peters Kim Cootes
GM Corporate Finance Senior Manager, Investor Relations
leila.peters@airnz.co.nz kim.cootes@airnz.co.nz
+64 27 297 0244 +64 21 743 057