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Qantas may use part of $A800m new capital for Air NZ stake


Wednesday 21st August 2002

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Australian airline Qantas said today it could use some of a planned $A800 million ($NZ942 million) new capital raising to fund a Air New Zealand stake.

Qantas said it intended to raise approximately $A800 million of ordinary equity through an entitlement offer to existing shareholders.

The airline said the capital raising would support its capital expenditure programme and help fund other potential investment opportunities that may arise including a possible buy-in to Air New Zealand.

Qantas reported its June year net profit rose to $A428.0 million from $A415.4 million a year earlier.

It posted an unchanged fully franked final dividend of 9.0 cents per share.

Qantas also said a recovery from heavy domestic discounting and events from September 11, 2001 had continued in the first month of the current year.

"Qantas expects the recovery trend to continue, however there are a number of factors which could impact future results," the company said in a statement.

The company said it planned to raise the fresh capital via a non-renounceable rights issue.

Analysts surveyed by Reuters forecast a $A428 million net profit for the airline which has dominated the domestic market following the collapse of its second ranked rival Ansett just days after the September 11 attacks.

Shares in the airline, which is 21 percent owned by British Airways Plc, last changed hands at $A4.69 yesterday before a trading halt was imposed on the stock.

The company said that BA would not take up its entitlement to the rights which would reduce its stake to 17 percent.

Qantas said it expected to continue growth in coming years.

"Qantas will seek cost efficiencies, structural changes and actively manage its operations with a view to improving profitability," it said.

"Strategies aimed at achieving these ends include a focus on market segmentation in both the domestic and international markets, investments in a new and more cost effective fleet, a focus on improving the profitability of subsidiary businesses and continued investment in technology."

"Qantas expects the recovery to continue, however there are a number of factors which could impact future results," it said.

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