Norwegian Air to exit insolvency proceedings in April 2021


Norwegian Air Shuttle expects to exit Irish insolvency proceedings in April 2021, after discontinuing long-haul operations and focusing on operating in the Nordic region.

According to the latest investor presentation, Norwegian Air Shuttle plans to raise up to $580 million in capital through a hybrid debt instrument, including $290 million from existing creditors. The airline expects that after exiting the restructuring process, new investors would own 70% of the air carrier‘s equity while converted creditors would hold 25% and current shareholders would hold 5% of the airline’s stake.

On January 27, 2021, Norwegian also announced the aim to reorganize its fleet and gain fresh equity by the end of February or early March 2021. The company counted that before the restructuring the write-off of leased aircraft assets would cut the equity by $1.2 billion. However, it is expected that the majority of creditors will convert the losses and debt into Norwegian equity.

Earlier in January 2020, Norwegian disclosed its plans to drop the long-haul flights from its business model and focus on its core Nordics business, operating a European short-haul network with narrow-body aircraft. Besides, the Norway-based airline would operate a fleet of 53 aircraft in summer 2021 with the majority of its routes to and from Scandinavian airports, it said in the presentation. 

Furthermore, the company aims to scale the fleet up to 68 aircraft in 2022 and operate the aircraft on so-called power-by-the-hour terms until March 2022. The new contracts should allow the company to pay for aircraft only when it would operate them.

The low-cost air carrier entered an examinership process in Ireland in November 2020, as it sought protection from its creditors in order to continue operations. At the time, Norwegian warned that it would need a fresh injection of capital in Q1 2021 if it were to continue flying after the examinership process.

Back on December 7, 2020, Ireland’s High Court granted the protection from its creditors giving the airline time to continue on the restructuration of its debts and escape the collapse.

 





Source link

pristinejet.com

imedia5.com