Air New Zealand

RNS Number:9309J
Brierley Investments Limited
13 September 2001



    MASNET No. 4 OF 13.09.2001

    Announcement No. 4

    BRIERLEY INVESTMENTS LIMITED

    Air New Zealand

    Singapore, 13 September 2001 - Brierley Investments Limited ("BIL") has
    today reached agreement with Air New Zealand, Singapore Airlines ("SIA")
    and the New Zealand Government on a NZ$300 million equity injection by BIL
    and SIA and a NZ$550 million credit facility to be provided by the New
    Zealand Government. This agreement follows Air New Zealand's decision to
    place the Ansett Group into voluntary administration and the impact of
    this decision on Air New Zealand's balance sheet.


    Under the terms of the agreement, BIL and SIA will each subscribe for
    NZ$150 million in new shares at the lower of NZ$0.67 per share (being the
    volume weighted average price of Air New Zealand's A and B shares traded
    on the New Zealand Stock Exchange on 7 September 2001) and the volume
    weighted average price of the A and B shares over the 10 trading days
    preceding the meeting of Air New Zealand's shareholders to approve the
    transactions. Based on an issue price of NZ$0.67 per share, BIL's pro
    forma shareholding in Air New Zealand after the share placement will be
    approximately 37%. A lower issue price will mean a higher shareholding.


    As part of the agreement, the New Zealand Government will provide Air New
    Zealand with a Note facility of up to NZ$550 million. Upon drawdown of
    this facility, Air New Zealand will issue to the Government two tranches,
    in equal proportions, of 7 year and 10 year subordinated notes. In
    addition, the Government will provide Air New Zealand with a two year
    revolving credit facility of up to NZ$200 million for working capital
    purposes. Any amounts drawn under this facility will be set off against
    the NZ$500 million Note facility.


    It is the intention of the parties that the equity injection and credit
    facility will provide Air New Zealand with sufficient capital and
    financial flexibility to maintain its operations following the decision to
    place the Ansett Group into voluntary administration. The agreement is
    conditional on various matters, including all necessary shareholder and
    regulatory approvals, the cessation of any further financial support to
    the Ansett Group, appropriate waivers and consents from Air New Zealand's
    creditors, and financial due diligence on the company.


    Under the agreement, BIL, SIA and the New Zealand Government have agreed
    that each of BIL and SIA will have the right to appoint three Directors to
    the Board out of a total of nine Directors. One each of the BIL and SIA
    appointees must be a New Zealand national, to be appointed after
    consultation with the New Zealand Government. BIL's, SIA's and the New
    Zealand Government's agreement will be sought on the appointment of the
    Chairman of the Board. The three parties are committed to working closely
    with one another to ensure that an appropriate level of focus is brought
    to bear in stabilising Air New Zealand's financial position following the
    losses sustained by the Ansett Group and in maintaining the airline's
    strong track record and its position as New Zealand's national carrier.


    Greg Terry, Chief Executive Officer of BIL, said:

    "We believe that the solution achieved today at Air New Zealand not only
    ensures that Air New Zealand has a viable financial future, but also in
    the longer term, restores value for BIL and all our shareholders. This
    solution provides the opportunity for us to rebuild value, which would
    otherwise have been lost."


    FINANCIAL UPDATE

    As a consequence of Air New Zealand's Board decision to place Ansett in
    voluntary administration and to write down the carrying value of its
    investment in Ansett to A$1, BIL will reduce the carrying value for its
    associate, Air New Zealand, by approximately US$163.1 million,
    representing its equity accounted share of the NZ$1.321 billion charge
    taken by Air New Zealand. The non-cash charge to the Profit & Loss Account
    will be disclosed as an exceptional item in BIL's results for the
    financial year ended 30 June 2001 which will be announced on 27 September
    2001.


    Following the disposal of its 28.7% interest in James Hardie Industries
    Limited in May of this year, it was anticipated that BIL would return to
    profitability in the year ended 30 June 2001. However, as a result of this
    significant write-off at Air New Zealand, BIL is now expected to report a
    loss for the year ended 30 June 2001.

    Enquiries:

    Brierley Investments Limited

    Singapore                            Tel:      [phone]

    Andrew Shepherd, Chief Financial Officer 
    Email: [e-mail]

    New Zealand                           Tel:      [phone]

    Arun Amarsi, General Manager               
    Email: [e-mail]

    Gavin Anderson & Company               Tel:      [phone]

    Richard Barton                      
    Email: [e-mail]

    Terence Foo 
    Email: [e-mail]

    Submitted by Jane Teah, Company Secretary on 13/09/2001 to the SGX