Auckland International Airport Equity Raise
Jarden acted as Joint Lead Manager and Underwriter for Auckland International Airport Limited’s NZ$1.4 billion equity raise.
Expertise
Capital markets structuring and execution, facilitating large-scale equity raises and ensuring strong investor participation.
Strategic Context
Auckland International Airport (AIA:ASX / AIA:NZX) is New Zealand’s largest and busiest airport, serving as a critical gateway for both international and domestic travel. To support its NZ$6.6 billion aeronautical capital investment programme, Auckland Airport announced a NZ$1.4 billion equity raise on 16 September 2024. The capital raise was designed to provide flexibility to fund its planned capital expenditure programme while maintaining its A- S&P credit rating and dividend policy.
Auckland Airport concurrently announced a contract with Hawkins for the construction of a new domestic jet terminal, increasing certainty around its upcoming funding requirement and being recognised by the market as a major de-risking event.
Execution
The equity raise was structured as:
- A fully underwritten NZ$1.2 billion placement of new shares.
- A non-underwritten retail offer of approximately NZ$200 million.
Jarden played a pivotal role as Joint Lead Manager and Underwriter, applying its expertise in capital markets to structure and execute the transaction. The offer price was set at NZ$6.95 per share, representing:
- A 7.0% discount to the ex-dividend adjusted last close price of NZ$7.48.
- A 6.3% discount to the ex-dividend adjusted five-day VWAP of NZ$7.41.
The recommended offer structure provided the tightest discount of alternatives to minimise dilution for non-participating shareholders.
To ensure fairness and broad participation:
- Auckland Airport endeavoured to allocate all existing eligible institutional shareholders who bid for their pro-rata allocation of the Placement at least that amount of shares.
- High-quality, long-term investors who demonstrated strong demand leadership were prioritised.
- Major NZ retail investor networks were also offered the opportunity to bid into the institutional placement on behalf of their clients.
- The standard Retail Offer application cap was increased to NZ$150,000, allowing greater participation from New Zealand retail investors.
Outcome
The equity raise became the largest follow-on equity offering in New Zealand’s history, receiving strong support from both new and existing investors. The oversubscription of both the Placement and Retail Offer highlighted strong market confidence in Auckland Airport’s long-term strategy, with institutional investors actively seeking well-positioned growth opportunities.
The funds raised will allow Auckland Airport to:
- Implement critical infrastructure upgrades, including runway resiliency improvements and terminal integration projects.
- Enhance connectivity between domestic and international jet services, reducing passenger connection times.
- Drive long-term economic benefits, with the terminal upgrade expected to create 2,500 construction jobs at peak development.
By securing substantial capital at a competitive pricing structure, Auckland Airport has reinforced its position as a strategic national asset, making a once-in-a-generation investment to be resilient and fit for the future.
