Air NZ shares grounded

By Phil Boeyen, ShareChat Business News Editor

Wednesday 26th September 2001

Trading in Air New Zealand (NZSE: AIRVA) shares have been halted early Wednesday after media reports that Prime Minister Helen Clark recommended investors shouldn't sell.

In a lead story Auckland newspaper the New Zealand Herald claimed Helen Clark has advised investors to hold on to their shares amid reports that her office has tested market reaction to the Government's increasing its commitment to the multimillion-dollar bailout of Air New Zealand.

"I'd recommend they hang on to them, because I am absolutely convinced that Air New Zealand has a viable future," the paper quoted Ms Clark.

The Prime Minister's apparent vote of confidence in the airline is believed to be responsible for a strong spike in the company's shares on Tuesday which ended well up on Monday's depressed prices.

Till now the government has been playing the future of the airline very close to its chest and has not even given the New Zealand public a guarantee that any tickets they buy currently will be honoured.

The Market Surveillance Panel says it has stopped trading in the company's shares until it can clarify the Prime Minister's "don't sell" statements.

Air NZ acting chairman Jim Farmer has been hinting at a beneficial outcome for the airline this week, releasing statements that claimed recapitalisation talks were progressing.

Ms Clark's comments have now firmed up speculation that the government is doing all it can to ensure the airline remains viable, replacing its earlier aloof approach to the company's financial meltdown.

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