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The case is being updated.
The main index on the Oslo Stock Exchange rises above one percent after Democratic candidate Joe Biden was declared the winner of the presidential election on Saturday.
At the same time, the arrow points clearly towards Norwegian, which before the opening of the exchange received no more than one billion in aid from the state. At the closing time on Friday, the stock closed at a closing price of NOK 0.644.
The stock has plunged more than 10 percent since the start of Monday, and is just under an hour away from trading down about 20 percent. At the time of writing, the stock is trading at around 50 øre.
Before the opening of the stock exchange, the Norwegian stock was placed under “special observation” according to the guidelines of the Oslo Stock Exchange. Oslo Børs writes in a statement that the stock will remain on the list “until more information is available on the company’s situation.”
Norwegian itself has announced a press conference at 10.30am on Monday morning.
Lose up to 500 million a month
The state’s no can get big for the crisis-stricken airline, which is struggling hard as a result of the crown crisis.
DN wrote last week that Norwegian loses up to 500 million a month and may run out of money in a few months. According to a government press release Monday morning, Norwegian requested support in the billion class, but received the following message from Trade and Industry Minister Iselin Nybø (V):
– We believe that the state’s primary consideration for adequate supply and healthy competition in aviation will continue to be served in the Norwegian aviation market. Norwegian has asked for financial support in the billions and the government has considered that in this situation there is no justifiable use of EU funds, Nybø says in the report.
Norwegian, for its part, is “very disappointed” by the lack of support.
– That the state has decided not to give more financial support to Norwegian is very disappointing and feels like a slap in the face, says Senior Manager Jacob Schram in a press release.
Two more options
In an interview with DN last year, Schram said work is underway to find a solution, and according to sources close to the process, the company now actually has few places left to go to put money in the coffers.
The state, which was previously one of these places, is now excluded.
This leaves the leasing companies, which are the major shareholders and own several of the planes Norwegian operates, or ultimately so-called hedge funds that will buy the company shaky cheap and profit from resale when traffic take off again.
Lars-Daniel Westby, head of research at Sparebank 1 Markets, told DN last week that he doesn’t think leasing companies are offering Norwegian fresh money.
If the leasing companies also say no, international hedge funds may be the last resort for Norwegian. Hedge funds are funds that can also sell stocks short, that is, profit from falling prices. But these funds can also come in to save companies, if they believe that the values will exceed the price they have to pay to buy stocks or debt.
Hedge funds have already acquired airlines such as Latam, Allegiant Travel and Virgin Atlantic, the airline of British billionaire Richard Branson. A source located in the center of Norwegian’s device says it is difficult to make a decision on what is best for the company before knowing what the Norwegian authorities are landing on.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
