Shares of Air New Zealand dropped on Wednesday when it resumed trading, following the government's divestment of 20 per cent to the tune of $NZ365 million ($324 million).

Shares dropped 3.3 per cent to $NZ1.595 on Wednesday, just slightly below the government sale level pitched on Monday. At 3 pm, the stock was 5 cents down, or 3 per cent, at $1.60, from a low of $1.565 earlier in the day.

The New Zealand government gained its $NZ365 million ($324 million) when it sold 221 million shares in the flag carrier for $NZ1.65 per piece. The shares were mostly sold to New Zealand investors.

Investors expected strong demand for the stock once trading began again. However, the opposite happened.

"What another bloody debacle," quoted one sharebroker. "It's so frustrating for the market that this happens."

"I think it's a pretty angry market right now," another broker said. "Clients are upset."

Government's stake in Air New Zealand from 73 per cent is now only placed at 53 per cent. But it has no further plans to reduce more its stake in the airline.

"It's one of the most successful such sell-downs in recent times," The Australian quoted Tony Ryall, state-owned enterprises minister. "And we're doing this while making sure there's majority New Zealand ownership."

"New Zealand broking firms will now be responsible for on-selling the shares they have purchased to clients who meet the New Zealander eligibility requirements," he said.

"We expect share brokers will commence this process overnight and it will be completed through tomorrow. Air New Zealand is a strong New Zealand brand recognised around the world."

Bill English, New Zealand finance minister, maintained that 88 per cent of Air NZ remains in the hands of local investors, including the government.

"You would expect the end result would be even more significant... And then you get this," brokers in New Zealand said.