March 3, 2024

Norwegian plans debt restructuring

Scandinavian airline Norwegian is seeking a debt restructuring in order to meet the criteria for a state guarantee scheme to help see it through the pandemic crisis.

It is trying to secure NKr3 billion in funding from the Norwegian Government but must take certain steps to satisfy equity conditions.

These include converting parts of its liabilities towards lessors, banks and other creditors into shares, converting part or all of bonds into shares, and a possible private stock placement with preferential treatment for current shareholders.

The measures will be discussed at an extraordinary meeting on May 4.

“The proposed measures are necessary in securing the next tranches of the Norwegian government state guarantee programme that will release NOK 3 billion. They are also necessary for the future of the company by strengthening the company’s balance sheet,” said CEO Jacob Schram.

“We will over the next weeks engage in dialogue with the bond holders, lessors and other creditors, with the intent of converting substantial debt to equity. This will create a platform which will enable Norwegian to return to the skies as an even better and stronger company to the benefit of the travelling public, our dedicated colleagues and current shareholders. “We have already started working on building the future ‘New Norwegian’ and that work will continue with full force the coming weeks.”

The airline has grounded the majority of its fleet due to coronavirus and has temporarily laid off around 90% of its workforce.