Case Study

Auckland International Airport

With airlines grounded, Jarden helped Auckland Airport navigate through the pandemic.

‘Supporting one of New Zealand’s critical infrastructure assets in achieving a great outcome is something of which we are very proud.’  

Sam Ricketts, Head of Investment Banking, Jarden


Closed borders, lockdowns and a rampant virus conspired to create a nightmare scenario for New Zealand’s travel industry in 2020, and among the worst affected companies was New Zealand’s gateway to travel and trade: Auckland International Airport.

The airport, a consistent NZX10 constituent since its listing in 1998, faced silent airspace, empty terminals and significantly reduced revenue as the COVID-19 virus sent its spikes around the world.

Auckland Airport responded quickly to the industry disruption, suspending over $2 billion of capital expenditure and significantly reduced operating costs. The Board, executives and staff reduced their remuneration while the company undertook a complex bank refinancing that extended bank maturities, put in place additional liquidity and obtained waivers for any potential breaches of it covenants out to 31 December 2021.  All this, whilst under lockdown and while playing a vitally important role of ensuring the safe repatriation of New Zealanders and tourists back home.

With the near term matters addressed, the airport turned its attention to the medium term horizon and how to optimally positioning itself for the expected recovery, however uncertain, in the global travel industry post COVID-19. To do this, $1.2 billion of equity capital was sought, New Zealand’s largest ever secondary raise.

Jarden, as joint lead manager and underwriter, recommended a placement-plus-SPP offer structure, as speed and certainty were vital given the volatile markets at the time. Fairness was a key consideration, so the $200 million SPP size was deliberately chosen to ensure that around 99% of retail investors would be able to apply for their pro-rata allocation in the SPP, with allocation of the placement focusing on pro rata as a first principle.

The raise itself was highly successful. Investor momentum allowed the raise to price at the top of the $4.50 to $4.66 range, a 7.5% discount to last close.  Existing shareholders and reputable long-term focused investors who had shown previous interest or support of Auckland Airport were allocated over 99% of the equity raise with applicants receiving at least their pro-rata allocation.

‘Supporting one of New Zealand’s critical infrastructure assets in achieving a great outcome is something of which we are very proud,’ says Sam Ricketts, Head of Investment Banking at Jarden. ‘Despite a period of significant volatility and one of the largest market sell-offs in history, investors recognised the strong underlying business and were very supportive of the approach taken.’

‘With balance sheet risk off the table and with shares allocated to high quality investors, Auckland Airport traded well in the after-market and has been able to focus on its operations during this unprecedented period, without any balance sheet concerns hanging over it.’

Sam Ricketts says Jarden staff worked hard to achieve this solid result, despite the disrupted working conditions faced by all New Zealanders and potential investors during the government-mandated lockdown. ‘We were pleased to be able to pitch in at such an uncertain time to support a vital symbol of New Zealand’s relationship with the world.’

Get In Touch

Connect with us today.