Auckland Airport to Raise Up to NZ$1.4 Billion, Signs Terminal Contract

By David Winning

SYDNEY--Auckland International Airport said it will seek to raise up to 1.4 billion New Zealand dollars (US$860 million) as it presses ahead with plans to upgrade facilities built some 60 years ago.

Auckland Airport said the raising will comprise an underwritten placement of new shares to raise up to NZ$1.2 billion and a non-underwritten retail offer to raise up to NZ$200 million. New shares will be issued in the placement at NZ$6.95 each, representing a 7.0% discount to the company's closing stock price on Friday.

Auckland Airport is the main gateway to New Zealand, and has tried to position itself as a hub for air passengers travelling to North America, including the U.S. Those plans were disrupted by the Covid-19 pandemic, as New Zealand implemented lockdowns to contain the spread of the virus.

The number of passengers moving through the airport has picked up as borders reopened, but has still not returned to pre-pandemic levels, partly due to constraints on airline capacity. Auckland Airport separately said on Monday that total passenger movements in August of 1.44 million were at 87% of levels seen before the pandemic.

Still, Auckland Airport is betting on passenger levels recovering through new investments. It has signed a contract with Hawkins worth around NZ$800 million for the construction of a new domestic jet terminal, which will be supported by proceeds of the equity raise. The work carried out by Hawkins forms part of a planned NZ$2.2 billion project that includes an airfield, baggage systems and other facilities.

Chief Executive Carrie Hurihanganui said some of the proceeds from the raising would also be used to repay a NZ$150 million corporate bond due to mature in October and another NZ$100 million of debt already drawn down.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

September 15, 2024 17:07 ET (21:07 GMT)

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