– Difficult to see that they go well buying shares now – E24

05/04/2020 Norway

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Robert Næs does not understand that the Norwegian share is shipped after the bailout plan in which shareholders are heavily ruled out received the go-ahead.

Robert Næs in Nordea closely follows the stock market.

Eind Senneset

published:Updated: May 4, 2020 1:11 PM, Posted: May 4, 2020 12:39 PM

I do not get it. It is hard to see that they are now making a profit from buying Norwegian stocks. This is a clear price mistake, says Robert Næss, Chief Investment Officer at Nordea.

Norway’s share rose more than 30 percent on the Oslo Stock Exchange on Monday afternoon, after the crisis-affected airline has obtained approval of its proposed rescue plan.

It involves, among other things, a massive conversion of debt into shares, which significantly dilutes shareholders.

Overwhelming yes to the rescue plan in Norwegian: – The only sensible decision

– Very high numbers

Næs notes that the Norwegian administration’s statement corresponds to a price when converting the debt to around NOK 3.5. Norwegian’s share price is NOK 11 billion, he notes.

Based on the current NOK 7.3 share price, the value of the shares is NOK 23 billion, according to Ness.

– That’s a very high number. Then you have to see how much money Norwegian makes. If it’s valued at NOK 11 billion, you should earn more than NOK 1 billion, and Norwegian only did so in 2016, says the chief investment officer.

– When the money runs out every month, it also seems too high that the price should be worth NOK 3.5. So you shouldn’t trade old shares for 7.3 crowns, he adds.

Norwegian Chief Financial Officer Geir Karlsen said at a press conference on Monday that the price of capital raising of up to NOK 400 million will be set during the day.

Shareholders agreed to this

A private placement where current shareholders and new investors have the opportunity to inject fresh capital into the company. 96.47 percent voted in favor of the proposal to raise up to NOK 400 million in fresh capital
An issue directed at bondholders so that the debt on the bonds can be reduced and instead they are awarded shares as compensation. 95.27 percent voted for this
A private placement where leasing companies receive shares in exchange for a reduction in lease debt. 95.32 percent voted for this

To ensure sufficient capital and leeway in the future, shareholders were asked to vote on these authorizations in addition:

That the board is authorized until June 30 of next year to carry out a new issue of shares to raise fresh capital. These shares will constitute approximately 28 percent of the company’s shares, after the initial issue and debt have been converted. 96.60 percent voted for this.
That the board is authorized to borrow a new NOK 10 billion by issuing a new convertible loan where creditors have the opportunity to exchange the loan for shares. 97.12 percent voted for this.
Shareholders will keep 5.2 percent of the company, according to CFO Geir Karlsen.

Stig has realized losses of eight million in Norwegian: – The heart probably won the battle against the brain

– It becomes another extreme dilution

Næs sees several reasons why investors continue to send the “people’s share” directly to the Norwegian share:

– The company is saved. This is good news and you may not have read the attached documents.

– Perhaps they also expect the course to be high, but it is not likely. It will be an extreme dilution. Now there will probably be 3.5 crowns in the first round and then the next round of more than 1 crowns will not go, he says.

He also believes that it is conceivable that today’s shareholders value that they will gain an advantage in public affairs. Næs believes it may have value, but emphasizes that the minutes of the general meeting make it clear that they will not receive this.

“The shares will be subscribed by ABG Sundal Collier ASA, Danske Bank, a branch in Norway and / or DNB Markets, part of DNB Bank ASA, on behalf of investors who have been assigned shares in the planned public offering of shares of the company. Therefore, the company’s shareholders will not have any pre-emptive subscription rights for the new shares, see Sections 10–4 and 10–5 of the Public Limited Companies Act, ”he declared Monday.

Guarantees the state guarantee

Shareholders have now accepted an issue of rights to raise fresh money and convert significant debt into shares. At the same time, the Board has been authorized to execute a new share issue, as well as to borrow $ 10 billion through a new convertible bond loan.

Chief Financial Officer Geir Karlsen said during the general meeting that today’s shareholders will keep 5.2 percent of the company. Almost all the shareholders who participated in the general meeting voted in favor of all the proposals of the Board of Directors.

Bjørn Kjos after Norwegian rescue: – Very good day

Thus, Norwegian received shareholder-dependent support for the country to receive the major restructuring package that will save the company.

The rescue package is complex and consists of several parts. The goal of this is for Norwegian to strengthen its balance sheet by reducing debt and raising fresh money in a matter of rights.

This will not only strengthen the company’s finances during and after the crown crisis, but will also ensure that they meet the conditions set by the Norwegian state for Norwegian to have access to 3.0 billion government loan guarantees.

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