Low-cost carrier Norwegian Air Shuttle has survived the Covid-19 pandemic with the help of a debt restructuring plan.
Chief executive Jacob Schram said Norwegian had “successfully” concluded a rescue plan after it raised 6 billion kroner (£508 million) through the sale of perpetual bonds, new shares and a rights issue. The Oslo-based airline had announced it was ending long-haul operations and focusing instead on European destinations in January, and detailed a plan to cut its fleet from 140 aircraft to about 50.
Norwegian said it had reduced its total debt by approximately 63-65 billion kroner (£5.3 billion-£5.5 billion) to around 20 billion kroner (£1.69 billion) under a plan which had to be approved by bankruptcy courts in Ireland, where its planes are registered, and in Norway.
Aircraft orders with Boeing and Airbus terminated
The plan was approved by the courts on Wednesday (May 26). It also demanded that the airline raise at least 4.5 billion kroner (£381 million) as part of a programme to emerge from bankruptcy protection in the two countries. Norwegian also terminated aircraft orders with Boeing and Airbus, worth approximately 85 billion kroner (£7.2 billion) in aggregated value.
The carrier received 3 billion kroner (£254 million) in loan guarantees from the Norwegian government last May as part of a restructuring plan. The Oslo gave another a 1.5 billion kroner (£127 million) in loans in January 2021, on the proviso that the airline raised at least 4.5 billion kroner from other investors. The Oslo government set several conditions for participating in the restructuring, including that the company must get new capital from private investors.
Chief Financial Officer Geir Karlsen told Norwegian news agency NTB that the airline had “negotiated with 30-40 large banks and several thousand creditors,” over the past year.