Norwegian Air proposes restructuring and share sale in bid to survive

Troubled Norwegian Air Shuttle will ask shareholders to back plans to raise €370 million days after an Irish court date crucial to the Scandinavian carrier's rescue hopes.

Norwegian and five Irish subsidiaries, which hold 72 of its 140 aircraft, will ask the High Court on Monday to extend their protection from creditors for up to three months and confirm the appointment of KPMG partner Kieran Wallace as examiner.

On Thursday the Oslo-based carrier said it aimed to raise up to 4 billion Norwegian crowns (€375.3 million) from the sale of new shares, state aid and some loans.

Norwegian is also proposing to swap existing debts, owed mainly to aircraft lessors and banks, for shares in the carrier. It completed a similar exercise in May as its financial woes worsened in the face of Covid travel bans.

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The airline intends holding an extraordinary general meeting on December 17th, where it will seek investors’ backing for the fund raising.

“The company asks for the continued support of its shareholders to prepare for future capital increases in parallel with the restructuring of its balance sheet,” Norwegian said in a statement.

Norwegian is flying just six of its aircraft, as the pandemic has grounded the remaining 134.

Mr Wallace is examiner to the five Irish subsidiaries, headed by Norwegian Air International and Arctic Aviation Assets. The High Court's protection from creditors extends to their parent, Norwegian Air Shuttle, as it guarantees their debts.

If the court confirms his appointment, he will have up to 100 days to execute a rescue plan that will include cutting Norwegian’s fleet, cancelling new aircraft orders, renegotiating debts and raising fresh capital.

An independent expert's report, written by Ken Fennell, partner in accountancy firm Deloitte's Dublin office, says that the group has a reasonable prospect of survival if these and other steps are taken.

Norway’s government last month rejected the airline’s plea for another injection of state funds. – Additional reporting Reuters