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Norwegian called shareholders to an extraordinary general meeting online Thursday to vote on a series of proposals to refinance the company. The board and management received a solid majority for all parts of the plan and can continue to work to save the group from bankruptcy.
CEO Jacob Schram was relieved after the session.
– This was important to us. Bankruptcy protection (in Ireland, editor’s note) has given us shelter for the winter, and what we got today was the toolbox for negotiations with creditors and other investors, he says.
– Have you ever had doubts about whether this plan should be carried out?
– You always have a little doubt about important events like this. I had a good feeling, says Schram.
In May of this year, the company had to be bailed out for the last time by shareholders, and at the time there was much greater uncertainty about whether the owners would accept a fully negotiated settlement with the large creditors.
Chief Executive Officer Jacob Schram (leading) and Chief Financial Officer Geir Karlsen will not comment on the sharp fluctuations in the share price. (Photo: Elin Høyland)
Divide 100 shares into one
Already Friday is the next step in crisis exercises, because then Norwegian stocks will be spliced (100 existing stocks will merge into one) and that is, the price level will change accordingly. In the last week alone, the price has risen by between 52 øre per share minimum and approximately one crown per share maximum. After a splice, this corresponds to between NOK 52 and 100 per share.
Shares occasionally rose more than 15 percent at the open Thursday, and the same levels after the general meeting. However, it is not obvious that the share will rise further, as market participants have pointed out that the share has been extremely overpriced for a long time.
CFO Geir Karlsen won’t say whether last week’s prices reflect real shareholder values.
– I have no comment on that, says Karlsen.
On Thursday afternoon, the price was around NOK 0.70, which corresponds to NOK 70 per share from Friday inclusive.
In the call for the general meeting, Norwegian has estimated that the new shares will be printed with a price in the range of five to 40 crowns each, that is, well below current price levels.
Later, the board changed the range from 5 to 200 kronor per share, but did not say anything about the reasons for the large range or how the price should be set.
Possible problem in February next year.
It is also unclear how much fresh money will be raised, “up to” four billion crowns.
Karlsen said during the general meeting that a rights issue may take place in late February 2021, or perhaps a little later.
– When will shareholders know more about the size and prices of the issue?
– There will be a balance in terms of what company we are after bankruptcy protection. Although we have a plan, we won’t know until sometime in January and February which parts of the business are involved. We are already testing the interest of investors, and when we have a clearer picture of it, we can determine how much capital we are going to raise and at what price, says Karlsen.
The board and management have recently frequently discussed the future of long-haul operations between Europe and other continents. DN wrote this week that several people on the board want to shut down the business, which has caused major losses and additional costs for Norwegian since the launch in 2013.
Silence about numbers in long distance
Schram says about the fate of long distance:
– This is an area that was changing even before entering this process, and in which we are working to make it more profitable. The strategy of moving from growth to profitability was laid out in 2018, and we saw that we were on a very good path forward in the long distance for the crown to occur.
– Has long distance ever had a positive contribution to results before the crown?
– We don’t comment on individual parts of the business in that way.
– When will you make a decision about long distance?
– We have started with that, and it is part of the solution of how the company should take care of bankruptcy protection. Then we’ll look at short and long distances and what’s next, says Schram.
Today’s meeting was opened by the chairman of the board, Niels Smedegaard, who recently kept it open if the long distance continues.
– It’s a great and good question, and of course we will spend some time on it. It can be said that at this moment all possibilities are at stake, but it has not been decided which way to go.
At the meeting, the council president requested broad powers.
– Most importantly, Norwegian will emerge from the crisis created by the crown and will emerge from it as an investment company, Smedegaard said.
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