Air New Zealand to draw on government loan

Taking a hit: Air New Zealand aircraft are seen at the Auckland Airport. The carrier forecast another loss this fiscal year as it reported an underlying pre-tax loss of NZ$87mil in the 12 months ended June 30, compared with a NZ$387mil profit a year earlier. — Bloomberg

SYDNEY: Air New Zealand Ltd plans to draw on a NZ$900mil (US$596.34mil) government loan within days to help it weather the coronavirus pandemic after reporting its first annual loss in almost two decades.

The funding injection will provide some much needed liquidity as the airline burns through cash, but it will come at a cost. Along with interest rates of 7%-9%, the loan gives the government the right to seek repayment through a capital raising after six months or convert the loan to equity.