Air NZ sells Virgin Australia stake to China's Nanshan

Air New Zealand said Friday it will sell the bulk of its stake in Virgin Australia to Nanshan Group, making the Shandong-based conglomerate the airline's second Chinese investor in as many weeks.

Nanshan will pay Aus0.33 cents a share for a 19.98 percent stake in Virgin Australia, valuing it at about Aus$230 million (US$170 million), Air NZ said.

"The sale will allow Air New Zealand to focus on its own growth opportunities, while still continuing its long-standing alliance with Virgin Australia on the trans-Tasman network," chairman Tony Carter said.

The Kiwi flag carrier was Virgin Australia's largest shareholder, with a 25.89 percent stake built up as the airlines forged an alliance against rival Qantas.

Carter said the deal needed approval from Chinese regulators, adding that Air NZ was considering its options regarding the rest of its Virgin Australia shares.

The move comes after Chinese aviation and tourism giant HNA bought a 13 percent stake in Virgin Australia on May 31.

At the time, Virgin said the tie-up would boost its access to the "rapidly growing Chinese travel market" and it would consider introducing direct flights between Australia and China.

Nanshan owns Qingdao Airlines, while HNA is parent of Hainan Airlines and last month took a stake in Portuguese national carrier TAP.

Virgin, Australia's second-largest airline, said in a statement that it expected Nanshan to seek a seat on its board.

"We look forward to meeting with Nanshan Group over the coming weeks to discuss the proposed acquisition," it said.

Air New Zealand shares rose 3.23 percent to NZ$2.24 in Wellington on the announcement.

Other major shareholders in Virgin Australia include Etihad Airways, Singapore Airlines and Virgin Group.

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