Icelandair Group is due to agree the €18 million acquisition of loss-making WOW Air on November 30 at a shareholders’ meeting. However, in a stock exchange announcement, it warned: “The share purchase agreement contains numerous conditions which will have to be fulfilled before the meeting. At this moment, Icelandair Group estimates that it is unlikely that all of the conditions will be fulfilled by that time.”
The announcement led the country’s financial regulators to suspend Icelandair Group’s shares on the Iceland Stock Exchange on Tuesday. Bogi Nils Bogason, Icelandair’s interim president and chief executive, said in a statement: “The company will continue to work on the transaction and the parties are continuing dialogue on the next steps.”
The difficulty stems from unspecified terms and conditions imposed on Icelandair’s unsecured bonds totalling $213.6 million. The airline said it would detail “a long-term solution” after Friday’s meeting.
“Icelandair Group will present measures to strengthen Icelandair’s balance sheet further and submit a proposal to bondholders that is intended to achieve a long-term solution for Icelandair Group and bondholders,” it said.
Icelandair Group charter subsidiary Loftleidir Icelandic is meanwhile pressing ahead with its purchase of a controlling stake in Cape Verde’s Cabo Verde Airlines. The deal, for an undisclosed price, will partly be paid for from work already completed by Loftleidir, which provides aircraft to the African carrier.