“Clear risk” of new Norwegian store owners running out – E24

Norway’s bailout plan will make foreign leasing companies unintentionally involve the airline’s major shareholders.

According to the Norwegians’ own estimates, leasing companies will remain with more than 50 percent of the company after the debt has been converted into shares, while today’s shareholders will remain at around 5.2 percent.

But several of the financial leasing companies, including Aercap, have little interest in owning the Norwegian shares. Therefore, several experts believe that there is a significant risk that the shares will be sold.

“Leasing companies obviously don’t want to have airlines,” says leasing analyst Helane Becker at investment company Cowen.

Lawyer Per Morten Christiansen of the law firm Selmer supports the analysis. He is an expert in refinancing and restructuring large loans.

– I think there is a clear risk that the leasing companies will sell their shares. They’re not meant to be airline owners, but a form of lender by owning and leasing planes, Christiansen says.

HSBC expects acquisitions in the industry

At the same time, the large bank HSBC expects strong airlines to buy assets from weak airlines as the market improves.

HSBC notes that airlines like IAG and Ryanair may emerge from the crisis stronger, while opportunities for acquisitions or mergers are one of the factors that can boost Norway’s share.

– IAG’s strategic position is likely to benefit from the proposed significant reduction in capacity at Virgin Atlantic and Norwegian, the bank writes in a report.

At the start of the crown crisis, HSBC analysts focused on which airlines had the best liquidity, and Norwegian was among the companies needing cash replenishment.

Meanwhile, European countries have provided various forms of crisis relief, which has resulted in fewer bankruptcies than HSBC expected.

But when the market recovers, Charles Darwin, who invented the theory of evolution, “will return from vacation,” the bank writes.

– Does not necessarily sell to another airline

Foreign airlines, including IAG, have considered buying Norwegian.

Former managerial duo Bjørn Kjos and Bjørn Kise, who used to be the company’s largest shareholders, even accepted an offer from an unknown player, but the deal fell into disrepair.

Leasing analyst Helane Becker does not necessarily believe that leasing companies will sell their Norwegian shares to another airline.

– Not necessarily for another airline, but in the open market it makes sense. That was my thought. They don’t want to own the airline, they just want to be paid for their planes, Becker says.

– How long do you think the shares will have?

– As long as they need to make their flight investments. They can always sell the shares to the company and the company can pay the rent for the planes.

Lawyer Per Morten Christiansen in Selmer explains that a possible sale of shares would generally occur through the so-called book creation process, where one or more brokerage firms are responsible for selling the shares.

– After the end of the stock market, a message is sent that an unidentified client must sell so many shares. Then they build a book to find the market value of the shares. They find buyers in the afternoon before the results are announced on the stock market the next morning, Christiansen says.

Leasing companies are subject to “blocking” rules

Norwegian garnered the support of the leasing companies a few minutes before this week’s general meeting, where shareholders ended up voting for the management bailout plan.

in The prospect for the next issue of Norwegians He advises management that leasing companies may intend to sell the shares they receive because they may not have a long-term horizon on their property.

The new actions are subject to so-called “lockout” rules, which will prevent all actions from being dumped in a short time, but Norwegian cautions that these rules are temporary, may be broken, and are subject to certain exceptions.

One of the exceptions is that a general offer will be made for the shares in Norwegian.

– The sale of a substantial number of the new shares, or the expectations of such sale, may have material adverse effects on the price of the Company’s shares, or even the ability of the shareholders to sell their shares on attractive terms, to time or in full. taken, it says in the prospectus.

Norwegian also cautions that the company may have to accept breach of the rules because new owners outside the EEA may have a negative impact on the company’s authorizations to operate air traffic.