Waiver from NZX LR 5.1.1 and 5.2.1

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14.12.2021
NZ RegCo Decision
Air New Zealand Limited (AIR)
Application for waivers from NZX Listing Rules 5.1.1 and
5.2.1

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Contents
Background 2
Waiver from Listing Rule 5.1.1 2
Decision 2
Reasons 3-4
Waiver from Listing Rule 5.2.1 4
Decision 4
Reasons 4-6
Confidentiality 6
Appendix One - Background 7

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Background
1. The information on which these decisions are based is set out in Appendix One to this decision.
These waivers will not apply if that information is not, or ceases to be, full and accurate in all
material respects.
2. The Rules to which these decisions relate are set out in Appendix Two.
3. Capitalised terms that are not defined in these decisions have the meanings given to them in the
Rules.
Waiver from Listing Rule 5.1.1
Decision
4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information
provided by Air New Zealand Limited (NS) (AIR) is complete and accurate in all material respects,
NZX Regulation Limited (NZ RegCo) grants AIR a waiver from NZX Listing Rule 5.1.1 (Rule
5.1.1) to the extent required to allow AIR to enter into and perform the Amended Crown Loan
Facility without needing to obtain shareholder approval.
5. The waiver in paragraph 4 above is provided on the conditions that:
a. That two Independent Directors of AIR certify (on behalf of the AIR Board) that:
i. the Crown Loan Facility Amendments have been negotiated on an arms’ length basis;
ii. entry into the Amended Crown Loan Facility is in the best interests of all AIR
shareholders (other than the Crown); and
iii. entry into the Amended Crown Loan Facility is not a major transaction for AIR
requiring shareholder approval for the purposes of the Companies Act 1993.
b. That the conditions and implications of this waiver are disclosed in AIR’s 2022 annual report.
c. That the entry into and performance of the Amended Crown Loan Facility is ratified by
Ordinary Resolution by 31 December 2022 with:
i. a notice of meeting having been provided to shareholders in accordance with the
Rules, with the information included under Rule 7.8.2 relating to both the Amended
Crown Loan Facility and the Debt Issuance; and
ii. NZX having provided written confirmation to AIR that it does not object to the notice of
meeting prior to dispatch of the notice of meeting,
provided that this condition in this sub-paragraph (c) will be deemed to have been satisfied
upon:
iii. the Amended Crown Loan Facility being terminated; and
iv. the Subscription Agreement being terminated with the effect that no shares under the
Debt Issuance remain on issue or are capable of being issued.

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Reasons
6. In coming to the decision to provide the waiver of Rule 5.1.1 set out in paragraph 4 above, NZ
RegCo has considered that:
a. AIR submits, and NZ RegCo has no reason not to accept AIR’s submission, that due to the
ongoing uncertain circumstances facing its business and the anticipated need for further
drawdowns under the Crown Loan Facility in the near term, AIR does not have the ability to
wait until it can convene a shareholders’ meeting in order to implement the Proposed
Restructure, including for clarity the Amended Crown Loan Facility.
b. AIR further submits, and NZ RegCo has no reason not to accept, that the terms of the
Amended Crown Loan Facility, in conjunction with the Debt Issuance described below and the
Crown’s on-going support for a capital raise, will provide additional comfort to AIR’s directors
as they make decisions from time to time about whether it is appropriate to draw-down further
under the Crown Loan Facility.
c. AIR submits, and NZ RegCo has no reason not to accept AIR’s submission, that the Crown
Loan Facility Amendments have been negotiated on an arms’ length basis, with AIR directors
making the final decision whether to agree to the Crown Loan Facility Amendments. The
conditions of the waiver require two Independent Directors of AIR to give certification to this
effect.
d. AIR submits, and NZ RegCo has no reason not to accept, that the terms of the Amended
Crown Loan Facility are in the best interests of all AIR shareholders (other than the Crown).
e. The entry into or performance of the Amended Crown Loan Facility by AIR will not change the
essential nature of the business of AIR.
f. If the Amended Crown Loan Facility is still in place, and a Debt Issuance has occurred and
the Subscription Agreement remains in force, than a shareholders’ meeting will be held before
the end of 2022, and shareholders will be provided with a notice of meeting containing
information relating to both the Amended Crown Loan Facility and the Debt Issuance in a form
that NZX has reviewed and confirmed that it has no objection to such notice of meeting.
However, no shareholders’ approval (and, accordingly, no notice of meeting or shareholders’
meeting) would be required if the Amended Crown Loan Facility has been terminated and the
Subscription Agreement has been terminated with the effect that no redeemable shares under
the Debt Issuance remain on issue or are capable of being issued.
g. The policy behind Rule 5.1.1 is to regulate those transactions which will significantly change
the nature of an Issuer’s business or which have a value that represents a majority of the
equity that investors hold in the Issuer and, as a result, are deemed to be so significant to the
Issuer, and therefore so likely to impact shareholders interests, that shareholders should have
an opportunity to consider the transaction and exercise their right to vote before the
transaction can take effect. NZ RegCo consider that the condition above at paragraph 5(c) will
allow, if the Amended Crown Loan Facility and Subscription Agreement have not been
terminated, shareholders the opportunity to consider the transaction. This shareholder vote
strikes a balance between certainty of funding for AIR, and the ability of shareholders to
consider Rule 5.1.1 transactions.
h. NZ RegCo notes that if AIR was to convene a shareholder meeting in the manner
contemplated under Rule 5.1.1, the Crown would not be restricted by Rule 6.3.1 from voting
on the ordinary resolution to approve the entry into the Amended Crown Loan Facility. Given
the Crown’s majority shareholding, the Crown would be able to control the outcome of that
Rule 5.1.1 vote. As outlined below this is not the case in relation to Rule 5.2.1.
i. AIR will release all material information relating to the Proposed Restructure to the market in
accordance with AIR’s continuous disclosure obligations, and AIR has provided NZ RegCo

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with a draft copy of the market announcement about the Proposed Restructure prior to
announcement.
j. The remaining amount available to borrow under the Crown Loan Facility is being reduced
(i.e., the transaction that would, absent a waiver, be subject to Rule 5.1.1 is a smaller
transaction than that which is currently in place, which already has the benefit of previous
waivers from Rule 5.1.1). While this is the case in relation to Rule 5.1.1 applying to the Crown
Loan Facility, Rule 5.1.1 does not apply to the Debt Issuance in accordance with Rule 5.1.2
(c).
k. The major transaction provisions of the Companies Act 1993 provide that transactions the
value of which exceed 50% of the value of the company’s assets must be approved by a
special resolution of shareholders, or be contingent upon such approval. This requirement
cannot be waived. Accordingly, shareholders are afforded the protections of the Companies
Act 1993 for transactions that are significant compared to the value of the company’s assets,
and will have the opportunity to vote on these transactions. In this instance, the entry into the
Amended Crown Loan Facility by AIR does not trigger this requirement and AIR shareholder
approval is not required by the Companies Act 1993. The conditions of the waiver require two
Independent Directors of AIR to give certification to this effect.
l. There is precedent for this decision, including the waiver decisions granted to AIR on 19
March 2020, 30 April 2021 and 30 September 2021 in relation to the entry into, and
amendments to, the Crown Loan Facility.

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Waiver from Listing Rule 5.2.1
Decision
7. Subject to the conditions set out in paragraph 8 below, and on the basis that the information
provided by AIR is complete and accurate in all material respects, NZ RegCo grants AIR a waiver
from NZX Listing Rule 5.2.1 (Rule 5.2.1) to the extent required to allow AIR to enter into and
perform the Subscription Agreement and the Amended Crown Loan Facility without needing to
obtain shareholder approval.
8. The waiver in of Rule 5.2.1 in paragraph 7 above is provided on the following conditions:
a. That two Independent Directors of AIR certify (on behalf of the AIR Board) that:
i. the Proposed Restructure has been negotiated on an arms’ length basis;
ii. entry into the Proposed Restructure is in the best interests of all AIR
shareholders (other than the Crown); and
iii. the Crown, as the majority shareholder in AIR, has not influenced the AIR
Board’s decision to enter into the Proposed Restructure.
b. That the conditions and implication of this waiver are disclosed in AIR’s 2022 annual report.
Reasons
9. In coming to the decision to provide the waiver of Rule 5.2.1 set out in paragraph 7 above, NZ
RegCo has considered that:
a. AIR has submitted, and NZ RegCo has no reason not to accept, that the timing considerations
referenced at paragraph 6.a above explain why AIR cannot wait for a shareholder meeting to
approve the Proposed Restructure.
b. AIR further submits, and NZ RegCo has no reason not to accept, that the Proposed
Restructure, in conjunction with the Crown’s on-going support for a capital raise, will provide
additional comfort to AIR’s directors as they make decisions from time to time about whether it
is appropriate to draw-down further under the Crown Loan Facility.
c. All material information relating to the Proposed Restructure will be disclosed to the market in
accordance with AIR’s continuous disclosure obligations, and AIR has provided NZ RegCo
with a draft copy of the market announcement about the Proposed Restructure prior to
announcement.
d. Rule 5.2.1 seeks to regulate transactions where a Related Party to a Material Transaction
may gain favourable consideration due to their relationship with the issuer. NZX has noted in
the NZX Guidance Note Major and Related Party Transactions that it may waive the
requirement to obtain approval of a Material Transaction if it is satisfied that the involvement
of any Related Party is plainly unlikely to have influenced the promotion of, or the decision to
enter into, the relevant transaction. The granting of this waiver will not offend the policy behind
Rule 5.2.1.
e. AIR has submitted, and NZ RegCo has no reason not to accept, that the Crown (as the
Related Party) is unlikely to have influence over AIR’s decision to enter into the Proposed
Restructure for the following reasons:
i) the need for the Crown Loan Facility arose as a result of external factors currently
adversely affecting AIR, namely the ongoing travel restrictions in New Zealand and other
countries and reduced demand for travel as a result of the COVID-19 virus;

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ii) the Proposed Restructure is being entered into in the context of a number of deferrals of
a proposed capital raising by AIR. Those deferrals have given AIR more time to assess
the impact of the current developments, including the vaccine roll-out, the suspension of
the trans-Tasman travel bubble, the ongoing domestic travel restrictions, other potential
border openings and broader consumer demand for international travel. Each of those
matters are factors that could impact the ultimate timing for a capital raise and the
amount of capital to be raised;
iii) each of AIR and the Crown has been involved (through and together with their respective
advisers) in its own assessment of the Proposed Restructure, with each party acting in its
own best interests;
iv) the Proposed Restructure is considered by the AIR’s Board to be in the best interests of
all AIR shareholders (other than the Crown);
v) the terms of the Proposed Restructure represent the best available terms in the
circumstances;
vi) the terms of the Amended Crown Loan Facility and the Debt Issuance are, taken as a
whole, in the best interests of all AIR shareholders (other than the Crown);
vii) while the Crown is the majority shareholder in AIR, it is not directly involved in AIR's day
to day business operations; and
viii) while the Crown does vote its shares to approve the appointment of directors (and is
consulted on appointments), it has not selected or appointed directors to the Board.
f. The condition at paragraph 8(a) provides comfort that any decision to enter into the Proposed
Restructure will be considered on an arms' length basis, that the Proposed Restructure will be
in the best interests of all AIR shareholders (other than the Crown), and that the Crown's
connection as the majority shareholder in AIR has not influenced the AIR Board's decision to
enter into the Proposed Restructure.
g. There is precedent for this decision.

Confidentiality
10. AIR has requested this decision be kept confidential until an announcement about the Proposed
Restructure has been released to the market.
11. In accordance with Rule 9.7.2(a), NZ RegCo grants this request.

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Appendix One - Background
1. Air New Zealand Limited (NS) (AIR) is a Listed Issuer with Equity Securities Quoted on the NZX
Main Board, and Debt Securities quoted on the NZX Debt Market.
2. The COVID-19 virus has had a material adverse impact on AIR's operations and financial
performance and position, due to travel restrictions in New Zealand and other countries and
reduced demand for air travel.
3. AIR entered into a debt funding agreement with the Crown on 27 May 2020 which was amended
and restated on 10 May 2021, and subsequently further amended pursuant to a letter of
amendment dated 30 September 2021 (the Crown Loan Facility). NZ RegCo granted waivers
from Rule 5.1.1 and Rule 5.2.1 on 19 March 2020 to permit AIR to enter into the original Crown
Loan Facility without shareholder approval, and again on 30 April 2021 and 30 September 2021
to permit AIR to amend the terms of the Crown Loan Facility without shareholder approval.
4. The impacts of COVID-19 and associated global and national lock-down measures, including
travel restrictions, social distancing requirements and border closures have had, and continue to
have, an unprecedented adverse impact on AIR's operations and financial performance and
position. In light of these continuing adverse impacts of COVID-19 on AIR, AIR and the Crown
have been discussing AIR's financial support requirements during the period up to a planned
capital raising of new ordinary shares (currently intended to occur in the first calendar quarter of
2022) and how the Crown's financial support for AIR might be re-shaped to better suit current
circumstances. The parties currently intend that any financial support provided by the Crown
under the Amended Crown Loan Facility and the Debt Issuance (each as defined below) be
terminated upon AIR’s capital raise occurring.
5. As a result of these discussions, AIR is proposing to restructure the Crown’s existing financial
support for AIR as follows:
a. increase the overall quantum of liquidity support available to AIR;
b. issue non-preferential non-voting redeemable shares to the Crown pursuant to the terms of
a subscription agreement (Subscription Agreement) entered into between AIR and the
Crown (Debt Issuance); and
c. amend the terms of the Crown Loan Facility (including to reduce that facility) (Crown Loan
Facility Amendments).
6. The Debt Issuance and the Crown Loan Facility Amendments (together, the Proposed
Restructure) are inter-conditional and will be implemented at the same time. The Crown Loan
Facility, as amended by the Crown Loan Facility Amendments, is referred to as the Amended
Crown Loan Facility for the purposes of this decision.
7. The Proposed Restructure has been and will be negotiated on an arms' length basis. All parties
are independently advised.
8. The entry into and performance of the Amended Crown Loan Facility:
a. will be a Major Transaction for the purposes of Rule 5.1.1 because it will involve AIR
entering into a transaction with a Gross Value in excess of 50% of its Average Market
Capitalisation; and
b. will be a Material Transaction for the purposes of Rule 5.2.1 because it will involve AIR
issuing its own Financial Products and borrowing an amount, in each case in excess of 10%
of its Average Market Capitalisation.
9. The Debt Issuance:

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c. will be excluded from the requirements of Rule 5.1.1 because, in accordance with Rule
5.1.2(c) it will involve an issue of a Financial Product for cash which does not significantly
change the nature of the Issuer’s business; but
d. will be a Material Transaction for the purposes of Rule 5.2.1 because it will involve AIR
issuing its own Financial Products and borrowing an amount, in each case in excess of 10%
of its Average Market Capitalisation.
10. The Crown is a Related Party of AIR because the Crown is a 51.91% shareholder of AIR
exceeding the 10% threshold pursuant to the definition of Related Party in the NZX Listing Rules.
11. The Crown has undertaken to AIR that it will vote in favour of any shareholder resolution required
under the condition stipulated in paragraph 5(c) in respect of the waiver from Rule 5.1.1.

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Appendix Two
Rule 5.1 Disposal or Acquisition of Assets
5.1.1 An Issuer must not enter into any transaction, or a related series of transactions, to acquire,
sell, lease (whether as lessor or lessee), exchange, or otherwise (except by way of charge)
dispose of assets where the transaction or related series of transactions:
(a) would significantly change, either directly or indirectly, the nature of the Issuer's business;
or
(b) involves a Gross Value above 50% of the Average Market Capitalisation of the Issuer,
Unless the transaction, or related series of transactions, is:
(c) approved by an Ordinary Resolution, or a special resolution if approval by way of special
resolution is required under section 129 of the Companies Act 1993, or
(d) conditional upon such approval required by paragraph (c) above.
Rule 5.2 Transactions with Related Parties
5.2.1 An Issuer shall not enter into a Material Transaction if a Related Party is, or is likely to become:
(a) a direct party to the Material Transaction; or
(b) a beneficiary of a guarantee or other transaction which is a Material Transaction,
unless that Material Transaction is approved by an Ordinary Resolution (such resolution being
subject to the voting restrictions in Rule 6.3) or conditional on such approval.

"Material Transaction" means a transaction, or a related series of transactions, whereby an
Issuer:
...
(b) issues its own Financial Products, or acquires its own Equity Securities, having a market
value above 10% of the Issuer’s Average Market Capitalisation...
(c) borrows, lends, pays or receives money, or incurs an obligation of an amount above 10%
of the Average Market Capitalisation of the Issuer (except in the case of an issue of Debt
Securities, in which case only the nominal amount of Debt Securities being issued to any
Related Party or to any Employees of the Issuer are to be taken into account);
"Related Party" means a person who, at the time of a Material Transaction, or at any time within
the previous six months, was:
...
(b) the holder of a Relevant Interest in 10% or more of a Class of Equity Securities of the Issuer
carrying Votes.