NZ shares fall as investors make way for $1b Auckland Airport placement
The S&P/NZX 50 Index dropped 171.36 points, or 1.7 percent, to 9,763.82. Within the index, 36 stocks fell, eight rose, and six were unchanged.
Auckland Airport shares were halted today at $5.04 to allow for a $1 billion placement to institutional investors at a discounted $4.50 a share. And the airport plans to raise another $200 million through a share purchase plan. The fully underwritten offer wasn't first run past cornerstone shareholder Auckland Council, which stands to get heavily diluted if it doesn't participate.
The airport said it needs to shore up its balance sheet as the pandemic causes nations to shut their borders and restrict domestic travel. The capital raising is almost 1 percent of the NZX's $136.2 billion equity market capitalisation, and is expected to attract international investors looking for cheap infrastructure assets.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said the capital raising was already being felt on the local market as investors sold down other stocks to take part.
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