Air New Zealand says "a change in the Government's shareholding while retaining a majority stake would have no influence on Air New Zealand's business but would provide greater market liquidity for shareholders".
In his first major speech of the year, Prime Minister John Key this morning said the Government is looking at selling some of its existing shares in Air NZ, while maintaining a majority stake.
It is also eyeing partial sales of other key state assets, including the three big energy generators and coal company Solid Energy as it looks to lower its borrowing.
The Government owns 76.5 per cent of Air New Zealand after it bailed the airline out with $885 million of taxpayer money in 2001.
It invested another $149 million in 2004 as part of a rights issue, taking its total investment to $1.03 billion.
Goldman Sachs JBWere aviation analyst Marcus Curley says it had been broadly expected that a partial sell down of the Government's stake in Air NZ would be among the shortlisted assets.
"I don't think the market is going to be hugely surprised with this. What the statement does today is firmly bring it on to the agenda."
Air NZ has poor liquidity for a company with a large market capitalisation, Curley says.
Improved liquidity would attract the attention from investors in New Zealand and overseas.
A counter investment by Air NZ's new Australian alliance partner Virgin Blue does not appear to meet the Government's test of a "widespread and substantial New Zealand ownership", Curley says.
Air New Zealand last week bought a 15 per cent stake in Virgin Blue to gain further exposure to the benefits of their trans-Tasman alliance and possible future cooperation on long haul routes.
Air New Zealand shares were trading at $1.43 this afternoon, down 2c and compared to the Government's average buy-in price of $1.29 each.
The airline paid the Government a dividend of $56.3m last year.
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