The raise will support the airport's capital investment programme
Russell McVeagh has advised Auckland Airport on a massive $1.4bn equity raise that is intended to support the airport’s capital investment programme.
“As the primary border of Aotearoa New Zealand and gateway to its largest city, Auckland Airport is making a once-in-a-generation investment to be resilient and fit for the future”, Auckland Airport Chief Executive Carrie Hurihanganui said in an NZX announcement.
She explained that the funds would initially be applied to cut down net debt and pay back a $150m October 2024 bond maturity as well as $100m in unhedged drawn facilities. The capital would also grant flexibility to finance the capital investment programme over “the remaining years of PSE4 and PSE5”.
The equity raise consists of a $1.2bn fully underwritten placement and a non-underwritten retail offer to raise a maximum of $200m. According to the NZX announcement, the placement will be conducted via a bookbuild that institutional and other select investors in New Zealand, Australia, and other jurisdictions will be asked to participate in.
About 172.7 million new shares will be issued under the placement – roughly 11.7% of current issued capital. The issue price comes in at $6.95 per share.
Meanwhile, qualified current shareholders in Auckland Airport with a registered address in New Zealand and Australia can partake in the retail offer. New Zealand shareholders can subscribe for a maximum of $150,000 of new Auckland Airport shares, while Australian shareholders can subscribe for up to AU$45,000, exclusive of brokerage or transaction costs.
The share price under the retail offer will be below the placement price. Auckland Airport will be able to scale applications or accept oversubscriptions at its discretion; this approach was taken in order to enable retail shareholders to apply for their pro rata share of the equity raise through the offer, according to the NZX announcement.
The application period for qualified shareholders closes on 4 October. New shares issued under the placement and the retail offer will be equal in rank to existing shares, although they will not be entitled to the final dividend, which is scheduled for payment on 4 October.
The equity raise comes after Auckland Airport inked an ~$800m contract with Hawkins to build and deliver a domestic jet terminal, which is intended to incorporate both domestic jet and international services in one place.
Russell McVeagh’s team on this transaction was spearheaded by corporate advisory partner Ian Beaumont, senior associate Hannah Brown and solicitor Britney Clasper.
In 2020, the firm also assisted Auckland Airport on a billion-dollar capital raising effort.
