Air New Zealand Ltd said on Friday the government reaffirmed that it would participate in the airline's capital raising to retain its majority stake.
The New Zealand government gave the flag carrier a NZ$900 million ($650.43 million) debt facility last year to help it navigate through the coronavirus crisis and give the airline time to review its capital structure and complete a fund raising by June 2021.
The government will take part in the equity raising if it agrees with terms set by the airline, Air New Zealand said in a statement.
Air New Zealand said in September it had begun to draw down on the facility, which gave the government the right to seek repayment through a capital raising after six months or convert the loan to equity.
Like its peers, the airline has been hammered due to pandemic-led travel curbs and previously forecast a second consecutive annual loss as it continues to burn through cash.
($1 = 1.3837 New Zealand dollars)
(Reporting by Anushka Trivedi in Bengaluru; Editing by Ramakrishnan M. and Aditya Soni)
