Council backs Wgtn airport refinancing

Wellington City Council has agreed to underwrite a $75m loan facility as part of refinancing efforts by the city’s airport.

The details of the underwrite, to be provided alongside fellow airport shareholder Infratil, were still to be worked out between the airport and Infratil, the council said in a statement.

“The support would be through an underwrite of a convertible equity type arrangement that would ensure that funding was able to be quickly accessed by the airport if needed,” the council said.

The arrangement “provides comfort to the airport and its lenders that the shareholders are there and supporting the company if necessary.”

Wellington International Airport, operating on only about 5 per cent of its usual domestic capacity, is expecting minimal revenue this year and has sought more flexibility from its lenders to keep running and repay maturing debt.

The airport, 34 per cent-owned by the council, is virtually shut.

This month, airport chairman Tim Brown told investors that discussions with the company’s banks had been very positive and additional equity support was not expected to be needed this financial year, based on current forecasts.

But he said that support, if required, could take a range of forms, including a standby loan similar to what the Government provided for Air New Zealand. Other options could include a convertible loan or an equity underwrite.