The Government is extending its loan facility to Air New Zealand by $600 million as the airline defers its planned capital raise to later in the year.
The $900m Crown loan facility made available to Air New Zealand in March last year has been extended to a debt facility of up to $1.5 billion.
The interest rate will be adjusted to "reflect current market conditions". The airline's first $900m tranche had a top interest rate of 9 per cent.
Finance Minister Grant Robertson told Heather du Plessis-Allan the letter he wrote to Air New Zealand outlines them being a commercially sustainable and capital efficient business.
"We've had a really good discussion with Air New Zealand, explaining what we expect a national airline to be for the country."
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