Auckland International Airport Limited has successfully completed a significant financial maneuver by raising NZD 1.2 billion through a fully underwritten placement. This move, announced on 16 September 2024, saw strong support from both local and international investors, demonstrating confidence in the airport’s future growth prospects.

The placement was fully subscribed at an offer price of NZD 6.95 per share, which represents a 7% discount to the ex-dividend adjusted last close price of NZD 7.48 on 13 September 2024. The raised capital will be used to fund Auckland Airport’s extensive capital investment programme aimed at upgrading its infrastructure. These enhancements are expected to increase the airport’s capacity to accommodate growing airline traffic and to build resilience against future disruptions.

Strong investor confidence and strategic foresight

Chief Executive Carrie Hurihanganui expressed satisfaction with the placement’s outcome, highlighting the strong investor community support as an endorsement of Auckland Airport’s broader strategic plans. The capital raised will primarily be used to deliver critical infrastructure projects that are crucial for enhancing the airport’s ability to handle increased traffic, especially as global travel demand recovers and expands post-pandemic.

A two-pronged capital raise strategy

In addition to the NZD 1.2 billion placement, Auckland Airport has also launched a NZD 200 million retail offer. The retail offer is expected to provide an opportunity for smaller investors, including eligible retail shareholders, to participate under similar terms to the institutional investors. This strategy not only diversifies the capital base but also allows the airport to engage with a broader segment of investors, potentially bolstering its financial standing further.

Settlement and future outlook

Settlement of the placement is scheduled to occur on 19 September 2024 for the Australian Securities Exchange (ASX) and on 20 September 2024 for the New Zealand Exchange (NZX), with trading commencing on the same day. The shares issued under this placement will rank equally with Auckland Airport’s existing shares but will not be entitled to the final dividend due on 4 October 2024.

Financial experts view this strategic move as an essential step for Auckland Airport to maintain its leading position in the region. By securing this substantial amount of capital, the airport is better positioned to execute its development plans and remain competitive in a rapidly evolving market environment.

Expert opinion: positioning for a post-pandemic resurgence

Analysts believe Auckland Airport’s decisive action to raise capital reflects a broader trend among major infrastructure entities preparing for a post-pandemic rebound. By improving its infrastructure, Auckland Airport not only ensures better service quality but also positions itself to capture a more significant share of the projected increase in international air travel. This strategic foresight is likely to yield substantial long-term benefits, aligning with global economic recovery trends.

  ASX, Auckland International Airport, capital investment, Carrie Hurihanganui, New Zealand, NZX