Creditors in Scandinavia lodge claims of almost €170m against troubled airline Norwegian

Those owed are mainly suppliers and some have secured debts

Creditors in Scandinavia have filed claims of close to €170 million against troubled airline Norwegian Air Shuttle (NAS), which has court protection in the Republic and its home country.

NAS and five Irish subsidiaries which hold most of its assets got provisional High Court protection from creditors last month, which Mr Justice Michael Quinn confirmed on Monday.

Mr Justice Quinn also confirmed the appointment of Kieran Wallace of KPMG as examiner to NAS, along with Irish-registered Arctic Aviation Assets, three of that company's subsidiaries, and Norwegian Air International.

NAS itself was granted parallel protection in the Norwegian courts the following day. Irish lawyers for the group, which owes creditors more than €4.1 billion, had said it would seek this in anticipation of any action taken against it in its home country.


Filings show that 17 creditors owed a total of 1.8 billion Norwegian kroner (€169 million) filed claims against NAS in Oslo. However, the protection granted by its local court means that these debts cannot be enforced until that order is lifted. The creditors are mainly suppliers, some of which have secured debts.

Senior counsel Brian Kennedy for the companies that were placed in examinership this week, told the High Court on Monday that the Irish proceedings would take precedence over the Norwegian court action.

Trade in Oslo

Meanwhile, the group’s shares added more than 70 per cent in trade in Oslo on Thursday to close at 0.935 Norwegian kroner. Local sources suggested the gain was on the back of day traders speculating in the stock.

The group will next week seek shareholders’ approval to raise more than €370 million through placing new shares, debt-for-equity swaps and other instruments.

An extraordinary general meeting of investors is scheduled for next Thursday, one day before the case is due back before the Irish High Court.

Norwegian last month elected to seek the Irish courts' protection as its 140 aircraft are held in companies registered in the Republic. Three Arctic Aviation subsidiaries, Drammensfjorden Leasing, Lysakerfjorden Leasing and Torskefjorden Leasing, hold 72 of those aircraft.

NAS guarantees all its subsidiaries’ debts, which is why it was granted protection and had Mr Wallace appointed as examiner. It also sells the seats on the airline’s flights, which in turn provides the cash to fund those subsidiaries’ activities.

The close links between the six companies meant any rescue effort required all of them to get protection from creditors. Before seeking the court’s aid, the group was poised to run out of cash in the early months of next year.

Mr Wallace has up to 100 days in total to finalise a rescue plan – known in legal jargon as a scheme of arrangement – for the airline.

This will involve cutting total fleet size and new aircraft orders, renegotiating terms with key creditors such as aircraft lessors and banks, cutting its operations and raising fresh capital. The High Court must approve any final scheme before it can go ahead.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas