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Norwegian’s creditors will lose large sums if the airline is liquidated and the planes are sold individually. That’s the message in a report Norwegian submitted to an Irish judge this week.
It is better for creditors that Norwegian can continue to fly in a reduced version, according to a report presented to the Dublin court.
Stein J. Bjørge
Published:,
According to a report prepared by the international auditing firm Deloitte on behalf of Norwegian, it will be a financial disaster for creditors if the airline files for bankruptcy.
After the sale of Norwegian’s plane, the loss to creditors will amount to 5.98 billion euros, according to the report. This corresponds to about NOK 64 billion.
That’s Irish newspaper Irish Times who has obtained the report that was presented to Judge Michael Quinn in Dublin on Wednesday of this week.
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Norwegian’s bankruptcy in Ireland is the best thing that can happen to the airline
More valuable in operation
The report obviously convinced the judge that Norwegian is even more valuable as a working airline (a going concern). This then instead of now being liquidated and sold for parts and divided.
That is Deloitte’s conclusion, even though Norwegian’s Irish subsidiaries are now in a situation where they can no longer pay the interest and agreed fees to their creditors.
According to the Irish Times, the Deloitte report further states that Norwegian will run out of cash in March 2021.
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Norwegian now has a maximum of 150 days to survive
Judge Michael Quinn received a report from Deloitte that warned of horrible losses to creditors in the Norwegian liquidation.
Collins court
Temporary protection first
The Irish judge therefore granted five of Norwegian’s Irish daughters so-called temporary bankruptcy protection until December 7. By then, creditors who may disagree must file objections.
If the company receives more durable protection, Norwegian and a designated administrator (the so-called examiner) have 70 days to submit a survival plan. If the referee likes the plan, Norwegian can get another 80 days.
CFO Geir Karlsen (left) and CEO Jacob Schram’s plan will include ditching many planes and getting creditors to make even more deferred payments.
TERJE BENDIKSBY
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These two Irish gentlemen decide the fate of the Norwegian
Must present several plans
According to the Deloitte report, there should be good opportunities for Norwegian to continue flying in a reduced version. But before that, Norwegian must negotiate with its creditors.
The return of rented aircraft, the sale of aircraft, the non-acceptance of the aircraft ordered, and loan repayment deferrals will be negotiated.
And not least: Norwegian and its KPMG examiner Kieran Wallace must be able to come up with a credible plan to get new stocks from risk-averse investors.
E24 has requested a comment from Norwegian regarding the report.
– We have nothing more to add now beyond what we announced in connection with the press conference and in the stock exchange announcements, says press contact Christer Baardsen in an email Saturday afternoon.
Irish auditor Kieran Wallace will be central to Norwegian’s plan to survive the next few months.
KPMG
A total of NOK 67 billion in debt
At the end of the third quarter, Norwegian had a total debt of NOK 67 billion. Continues to grow. Norwegian’s total assets were then recorded at NOK 78 billion.
So it is not a big deal for Deloitte’s Irish auditor to think that the planes can be sold, assuming a loss to creditors of up to NOK 64 billion.
The vast majority of the debt corresponds to Irish subsidiaries. The subsidiary Arctic Aviation Asset, and again the daughters of this company, own and lease a total of 140 aircraft.
According to the Deloitte report, the debt was NOK 47 billion. This includes NOK 19 billion in debt obligations for Airbus and Boeing reserved aircraft.
