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Norwegian Air Shareholders Back Restructuring Plan

OSLO, Dec 17 (Reuters) - Norwegian Air’s shareholders endorsed the carrier’s financial rescue plan in a series of votes on Thursday, the airline said, one of several hurdles the company must clear to survive the COVID-19 pandemic.

Norwegian faces difficult negotiations with creditors in the coming months as it seeks to reduce its debt and liabilities of some 66.8 billion crowns ($7.75 billion). It must also find investors and lenders willing to put up fresh cash.

The airline obtained creditor protection this month from courts in Norway and Ireland, giving it some breathing space as it seeks to convert debt into equity.

The company aims, with the help of the courts, to emerge by Feb. 26 as a smaller but more efficient carrier with fewer aircraft, less debt and more equity.

More than 80% of Norwegian’s owners voted in favour of letting the board raise up to 4 billion Norwegian crowns from a sale of shares or hybrid instruments.

If it fails, Norwegian has said it could run out of cash by the end of March.

The company, which helped transform transatlantic travel by expanding the European budget airline business model to longer-haul destinations, has been forced to ground all but six of its 140 aircraft amid the coronavirus pandemic.

“The way the situation looks now, Norwegian will start to ramp up production from around April next year,” business web site E24 quoted Chief Financial Officer Geir Karlsen as saying.

Major creditors include aircraft lessors Aercap and BOC Aviation, planemaker Airbus and the United States Export-Import Bank, which helped finance purchases of Boeing jets.

Norwegian’s major aircraft-owning subsidiaries are Irish, but the parent company Norwegian Air ASA is registered in Norway.

Norwegian’s shares rose 10% by 1031 GMT to trade at 0.67 crowns in Oslo but are still down 98% so far in 2020.

($1 = 8.6226 Norwegian crowns)

Reporting by Victoria Klesty; Writing by Terje Solsvik; Editing by Gwladys Fouche

Source: Reuters


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