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By midnight, lenders will decide whether to give the bankrupt Norwegian a chance to survive the crown crisis. But the negotiations are running out of time. – If it doesn’t turn into a yes, it takes a miracle to save Norwegian, says flight analyst Hans Jørgen Elnæs.
Lenders are in bonds issued by Norwegian for the equivalent of $ 1.2 billion. Norwegian has offered lenders 41.7 percent of the shares as compensation for these loans.
Around 5 o’clock, the lenders would decide on the drastic proposal. But the negotiations have dragged on over time, and Norwegian has come up with a new and more generous offer.
What the CEO Jacob Schram asking for “the last offer” means that half of the debt and 80 percent of a so-called $ 150 million convertible bond loan must be repaid with the shares. In addition, the proceeds from the sale of the most lucrative outings at Gatwick in London are deposited as collateral. Lenders have until midnight to decide.
“Spacious in the Right”
– If it becomes a no tonight, it is a very, very serious situation for Norwegian. So the battle is almost lost and a miracle is needed to avoid bankruptcy, he says. Hans Jørgen Elnæs.
About the new offer, he says:
– Norwegian has been properly spread with butter on the slice of bread to make it taste a little better, in an attempt to convince the counterpart.
Who the lenders are is secret, and the negotiations are handled by a representative. Two thirds have to say yes to make a deal come true.
State loan guarantees
The vote will be the first big step in a series of decisions that in a few days could open the door to government loan guarantees of NOK 2.7 billion.
Previously, Norwegian had received Norwegian loan guarantees of SEK 300 million, but the additional support has been conditional on the drastic debt restructuring, the fate of which will be decided tonight.
Norwegian leasing companies must also be part of the plan. They have been offered 53.1 percent of the shares for their leases.
Finally, the emergency plan will be discussed at an extraordinary general meeting, which is scheduled for Monday, May 4, where existing homeowners will say yes or no when they see their property diluted in next to nothing.
Dilute property
In addition to Debt Mountain’s major restructuring, Norwegian plans to include NOK 400 million in a new share issue. Following this new problem, the crisis plan as a whole would dilute the ownership stake of existing shareholders to just over 5 percent.
The four Norwegians’ personnel companies in Sweden and Denmark, with a total of 4,700 pilots and cabin workers, filed for bankruptcy just over a week ago.
The Norwegian airline has become in a few years the third largest low cost airline in Europe. But recent years have been characterized by major financial problems as a result of the rolling of Rolls-Royce engines and the company was forced to park all of its Boeing 737 Max aircraft.
During the crown crisis, like most of its competitors, Norwegian has almost completely parked its aircraft fleet. The Norwegians’ four companies of personnel in Sweden and Denmark, with a total of 4,700 pilots and cabin crew, filed for bankruptcy just over a week ago.
Norwegian has lost 88 percent of its market value since the turn of the year. The price collapse follows that about half of the market capitalization was wiped out last year as a result of the company’s financial problems in handling all parked Boeing Max aircraft.
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