[WELLINGTON] Air New Zealand Friday said it has agreed to sell a 19.98 per cent stake in Virgin Australia Holdings to China's Nanshan Group.
Shares in the New Zealand national carrier were up 3.2 per cent in morning trade shortly after the announcement.
In a release to the New Zealand Exchange, Air New Zealand said that under the terms of the agreement, it would sell the shares for A$0.33 per share to the privately owned Nanshan Group. The shares closed Thursday at A$0.28.
The sale is subject to and will take place after receipt of Nanshan Group regulatory approvals from Chinese authorities, Air New Zealand said.
Earlier this year, Air New Zealand announced it was looking to sell its stake in Virgin Australia.
In late May, China's HNA Aviation announced plans to buy a 13 per cent stake in Virgin Australia, with plans to go up to 19.99 per cent.
Virgin Australia said at the time it did not expect that deal would require approval from Australia's Foreign Investment Review Board.
If completed, the two transactions would dramatically change the shareholder register at Virgin Australia, with the two Chinese conglomerates as well as current major investors Etihad Airways and Singapore Airlines as the top four shareholders.
Air New Zealand said on Friday that options regarding its remaining stake in Virgin Australia would be considered in due course.
Air New Zealand currently has a 25.9 per cent stake in Virgin Australia, although that sake will be diluted to 22.5 per cent if the proposed deal with HNA Aviation goes through.