Irish judge says yes to rescue plan – E24

Irish High Court Judge Michael Quinn confirmed a little past 5:20 p.m. Friday that he will approve the rescue plan for Norwegian.

Therefore, Norwegian passes a crucial milestone in the intense work that has been done to save the company.

– Well done to all parties involved, Quinn said when the hearing ended just half an hour later.

The written verdict is not yet ready, but the judge made it clear verbally that he is judging in favor of the bailout plan, some four months after Norwegian filed for Ireland’s bankruptcy protection.

The sentence becomes final after the one month appeal period has elapsed.

– We are very pleased that the Irish court has approved the rebuilding of Norwegian in Ireland. We now have the ticket we need to be able to continue rebuilding here in Norway and raise new capital, says Jacob Schram, Norwegian CEO, in a statement.

Read the details in the rescue plan below in the case!

It can be completely finished on May 26.

The Norwegian group is protected by bankruptcy in both Ireland and Norway. It is the airline and the court-appointed rebuilders who have prepared the rescue plan.

The Irish judge accepted the proposal that May 26 be the date that Norwegian can exit bankruptcy protection and continue operations as a normal company.

– This is a demanding process that is not over yet, but today’s court decision strengthens our faith in a positive outcome. We are preparing to be there for our customers when the effects of the pandemic subside, travel restrictions ease and the world reopens, says Norwegian CEO Schram.

Several creditors have been critical along the way, but along the way, an agreement was reached or the court’s decision overturned.

Finally, Norwegian has received the support of a sufficient number of shareholders and creditors for the plan to be accepted by the court.

During the closing hearing on Thursday and Friday, there were no creditors who opposed the rescue plan, with one exception.

The Irish Environment Agency (EPA) had objections to the handling of CO quotas, but the judge made it clear that this situation does not stand in the way of a lawsuit.

Two key conditions must be met

Norwegian was sent into its greatest crisis thanks to the corona pandemic. The restructuring that we are trying to achieve now is the second during the pandemic.

The Irish judge has set two key conditions for the verdict: the Norwegian court must also approve the rescue plan and Norwegian must be able to raise at least NOK 4.5 billion in fresh capital.

This is scheduled for April, according to Norwegian.

The judge noted that Norwegian and the rebuilder have not established guarantees to ensure that the company will receive the 4.5 billion, which is actually a requirement of Irish law. However, he made an exception and noted:

“But I’m convinced that in this case, the rebuilder and others have provided enough evidence that it can be done,” Quinn said.

During the first day of the hearing on Thursday, Irish reorganization lawyer Paul Sreenan stated that an investor has confirmed their willingness to provide NOK 1 billion and that DNB Markets believes the capital raising is realistic.

See the overview of the important dates in Norwegian’s financial rescue plan below in the case!

Norwegian process is a heel notch

Now the legal ball must be kicked to Norway.

Once the verdict is ready in Ireland, the Norwegian reconstruction creditors will immediately receive the rescue plan for a vote.

This vote will take two weeks and will end around April 9, before the Norwegian court can make a final decision on the Norwegian part of the process.

Norwegian has applied for and obtained bankruptcy protection from both Irish airline Norwegian Air International, Arctic Aviation, parent company Norwegian Air Shuttle and various subsidiaries.

The Norwegian reconstruction at the Oslo city sheriff’s office follows the example of the Irish one, and is actually the same rescue proposal that is presented there.

Norwegian has organized a race in which the Norwegian Process Examiner is authorized to vote for absolutely all creditors voting in Ireland. Thus, in reality, a yes is guaranteed during the Norwegian vote.

This is what the rescue plan looks like

During Thursday’s hearing, it was revealed that Norwegian believes it will have a total of 3,300 employees after the restructuring.

Norwegian had a maximum of 10,215 employees at the end of 2018.

The most important points of Norwegian’s rescue plan are the following:

• Long-haul investment to be discontinued with the Boeing 787 Dreamliner
• The number of short-haul aircraft (Boeing 737s) will be reduced by more than half to 53 aircraft (50 in operation, 3 in reserve)
• Total (gross) debt will drop to around 20 billion
• The focus will be on the Norwegian and Nordic markets, with routes to the most popular destinations in Europe.
• NOK 4.5 billion will be raised in fresh capital, distributed as follows: 400 million in share issues to existing shareholders, up to 2.6 billion from new investors and up to 1.875 billion in hybrid capital (of which the state provides 1.5 thousand millions)
• Unsecured debt again receives a 5 percent dividend on cash and shares in Norwegian
• The existing shareholders, in principle, will be with 4.6% of the company, the creditors with 25.4% and the new investors with 70%, including the possible participation of the old shareholders in the issuance of shares planned for this spring.
• The price of converting the debt into shares is NOK 8.23, while the issue can be priced at around NOK 6 (as calculated by E24).