Singapore Airlines (SIA) has sold its stake in Air New Zealand (ANZ), putting an end to a four-year equity partnership that SIA came to regret and which cost it millions of dollars.
SIA sold its remaining 6.3% stake in its Star Alliance partner for NZ$61.7 million ($41.5 million) on 5 October. The 38 million shares were sold through a placement to domestic and foreign institutional investors for NZ$1.63 each.
SIA said in announcing the sale plan that the move was "consistent with its strategy to monetize non-core holdings". It said operational partnership activities between the two, which includes extensive codeshare links, will continue.
The investment has proved costly for SIA. The carrier originally bought 25% of ANZ in 2000 for a total of NZ$426 million as part of a controversial policy of expanding by acquiring stakes in foreign airlines. But the value of this stake fell dramatically when ANZ fell into serious financial difficulty on the back of the collapse of its Ansett Airlines subisidiary. The New Zealand government was eventually forced to step in and bail out its national airline.
SIA has said it remains committed to its own strategy geographic expansion by buying into other carriers, despite its large losses on ANZ. Its remaining key foreign airline shareholding is in Europe, where it has held a 49% stake in Virgin Atlantic Airways since April 2000.
Source: Airline Business
