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Apply for travel industry jobs or advertise your own recruitment brief.Norwegian seeks debt restructure to access vital state aid
Norwegian will look to restructure its debt in an attempt to raise the equity it needs to qualify for up to NOK 3 billion (£236 million) in state aid, which could prove vital to the airline’s future.
The budget carrier will hold an extraordinary general meeting on 4 May whereby it will seek permission to convert sufficient debt to equity to meet the requirements for cash guarantees set out by the Norwegian government, which it said would create a "sustainable platform" for the company’s future.
It will ask key stakeholders, including aircraft lessors, bond holders, convertible bond holders and suppliers, to take part in the process, which could also involve a subsequent private offering of shares in the carrier for straight cash.
Norwegian said the debt conversions and new equity would release liquidity under the government guarantee program, ensuring the company can "sustain the current Covid-19 environment", start preparing to resume flight operations, bring back furloughed employees, and build a "new Norwegian".
It has already met the requirements for the first tranche of available state aid, which amounts to around £23 million.
“The proposed measures are necessary in securing the next tranches of the Norwegian government state guarantee program that will release NOK 3 billion," said Norwegian chief executive Jacob Schram. "They are also necessary for the future of the company by strengthening the company’s balance sheet.
“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.
"We have already started working on building the future ’New Norwegian’ and that work will continue with full force in the coming weeks."
In response to the coronavirus pandemic, Norwegian has furloughed the majority of its workforce and temporarily grounded most of its fleet.
It revealed earlier this week it was forced to cut March capacity by 70% in the space of a week owing to new travel restrictions arising from Covid-19.
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