– Has serious financial problems – E24

On Monday afternoon, it became clear that Norwegian will receive bankruptcy protection under the Irish “examinership” scheme. The next day, the company announced that it would also file for bankruptcy protection here at home.

Just over two hours after the request was made public, the Oslo City Sheriff’s Office approved the request.

Shortly after the stock market opened, Norwegian stocks rose about 20 percent before backing off a bit. But after the announcement of the Norwegian approval, at 10.45 there is again a good speed in the action, which is now up 22.12 percent to a price of 0.4534 kroner.

The Oslo City Sheriff’s Office writes in failure that, based on the information provided by Norwegian, it considers that the airline “is in serious financial trouble” in accordance with the provisions of the Reconstruction Act.

“Best served” with reconstruction

In addition, the Mayor notes that the ‘review’ has been opened in Ireland, and that both creditors, employees and owners ‘will best benefit from a reorganization solution’, and that a bankruptcy in the company will lead to large losses for all parties.

The judge notes that although Norwegian has received bankruptcy protection in Ireland, “the lack of Norwegian rules on the recognition of foreign insolvency proceedings means that NAS (Norwegian Air Shuttle editor’s note) must open a parallel reconstruction in Norway.”

“After a general evaluation, the court concludes that it is not unlikely that NAS will be able to reach an agreement on the reconstruction with its creditors,” the judge wrote in the ruling.

Reserve three million for negotiations

Norwegian’s lawyer, Christopher Jerving of the BAHR law firm, has confirmed to the mayor that the airline has paid three million crowns to cover costs related to the reconstruction negotiations.

This is paid for in advance as the airline itself can go bankrupt even under bankruptcy protection. In theory, this can happen if the airline under protection runs out of money and can no longer pay to maintain operations.

Norwegian has previously announced that it wants to raise NOK 4 billion from investors through a share issue. This will be put to a vote among shareholders during the company’s extraordinary general meeting next week.

Parallel negotiations

Norwegian has filed for bankruptcy protection with the Asker and Bærum District Court, but an agreement between the courts ensures that it will be transferred to the Oslo City Sheriff’s Office. It occurs because “because the Oslo city sheriff’s office has the highest professional competence in the country in the area,” according to a court statement.

Håvard Wiker of the Ro Sommernes law firm has been appointed reorganizer.

The decision to apply for bankruptcy protection in Norway means that Norwegian will conduct parallel reorganization negotiations in the two countries.

– A parallel reconstruction under Norwegian law will be to the advantage of all affected parties and will increase the probability of a successful outcome. Our goal is to secure company jobs and help ensure critical infrastructure and value creation in Norway, Norwegian CEO Jacob Schram said in a press release Tuesday morning.