Norwegian Air rescued after shareholders approve huge package
Struggling airline Norwegian Air has won approval for its mammoth NOK 10bn (£770m) rescue package, after bondholders, shareholders and aircraft lessors gave a debt-for-equity deal the nod.
The low-cost carrier’s shareholders voted 95% in favour of all of the airline’s proposals at an emergency meeting in Oslo on Monday, including a share issue worth NOK 400m, even though the resulting dilution would leave them with just 5.2% of the company.
Chief executive Jacob Schram warned them that there was no alternative, saying that “it will be game over” before the meeting, and afterwards describing it as “perhaps the most exciting financial thriller Norway has ever seen”.
The plan will also see another NOK 2.7bn of Norwegian state aid directed to the airline, on top of the NOK 300m it has already received to help see it through the coronavirus crisis, with the government making the fresh injection dependent on it cancelling its debt.
Its management now believes it will be able to weather the Covid-19 storm and avoid bankruptcy, giving some reprieve also to Gatwick Airport, where Norwegian is the third-largest carrier.
The East Sussex airport was battered by news last week that, having suspended its operations there for the time being, IAG’s British Airways was considering pulling out of London’s second airport altogether.
Norwegian Air grounded 95% of its fleet in mid-March as the coronavirus pandemic took hold of its two primary markets - Europe and the United States - and had warned that its cash could run dry by the middle of May without its rescue package.