Air New Zealand gets further $338 mln govt loan as pandemic headwinds continue

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Dec 14 (Reuters) - Air New Zealand Ltd (AIR.NZ) said it has increased its government loan facility by NZ$500 million ($337.90 million) as it faces continued headwinds from domestic lockdowns and COVID-19-related travel restrictions across its global network.

The company plans to raise fresh equity in the first quarter of 2022 to weather the impact of the pandemic, the airline said on Tuesday. The government had earlier promised to participate to maintain its majority shareholding in the national flag carrier.

Air New Zealand suspended its cash burn outlook in October following tough coronavirus restrictions in Auckland, as the country's largest city tried to contain an outbreak of the Delta variant of the virus.

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Since then, the government has outlined a plan of phased reopening of borders from 2022, which the airline says provides an indicative pathway to reopening New Zealand for international travel.

"However, the future impacts of COVID-19 remain uncertain and circumstances continue to change all over the world, " Air New Zealand said.

"It is important that the airline has sufficient flexibility to withstand presently unforeseen delays without relying entirely on increasing debt levels."

The new package makes an overall liquidity support of NZ$2 billion available to the airline. As of Dec. 14, the company has drawn NZ$505 million of the existing loan and estimates borrowings from the support package could be NZ$900 million by late February or March 2022.

($1 = 1.4797 New Zealand dollars)

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Reporting by Arundhati Dutta in Bengaluru; Editing by Shounak Dasgupta

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