Air New Zealand (ANZ) will move to hold a 0.8% stake in Virgin Blue in the form of equity swaps instead of direct shares, after a report found that ANZ's recent share acquisition in the airline has led to a breach of foreign ownership restrictions.
ANZ will convert these swaps into a direct shareholding when Virgin Blue's other foreign shareholders reduce their stake sufficiently, it adds. "These swaps confer no ownership rights but provide price protection for purchase at a later date," says ANZ.
The Star Alliance airline acquired a 14.9% stake in Virgin Blue in January for A$145 million ($147 million). A report commissioned by Virgin Blue after the acquisition found that foreign shareholders now hold 49.78% in the carrier.
Under Australian law, foreign ownership in the country's international airlines is capped at 49%.