NZ’s Auckland Intl Airport to raise $861.8 million, signs contract to build new terminal

(Reuters) – New Zealand’s Auckland International Airport said on Monday it will undertake an equity raise of NZ$1.4 billion($861.8 million) for a planned capital investment program.

The equity raise comprises an underwritten placement of NZ$1.2 billion and a non-underwritten retail offer to raise up to NZ$200 million, the company said.

The placement is at an issue of NZ$6.95 per share, representing a 7.8% discount to Auckland International Airport’s last closing price of NZ$7.54 on Friday.

The proceeds from the equity raise will be used to reduce net debt, and provide flexibility to fund its planned capital investment programme over the remaining years of price setting event 4(PSE4) and PSE5, said Chief Executive Carrie Hurihanganui.

The domestic jet terminal project is a key part of Auckland International Airport’s integration programme and of the wider NZ$6.6 billion aeronautical capital investment programme over PSE4 and PSE5 until 2032.

The airport operator also signed an NZ$800 million contract on Monday with Downer EDI’s unit, Hawkins (NASDAQ:HWKN) Limited, to manage the construction and delivery of a new domestic jet terminal building.

The terminal will bring domestic and international services under one roof.

The contract, which is part of a NZ$2.2 billion new domestic terminal build, will create around 2,500 jobs for the country at peak, the company said.

Shares of the airport facilities provider were halted on Monday and will resume trading on Wednesday or post the completion of the placement, it said in a statement.

($1 = 1.6244 New Zealand dollars)