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Norwegian Air appears to complete requirements for government loan guarantees

Norwegian appears to have pulled off a successful share offering yesterday. This was the final step in obtaining loan guarantees from Norway's government that are expected to give the airline adequate cash to stay afloat through the winter.

Shares for the offering were priced a NOK 1, which is about 10 cents US and is well below the current trading level of around 40 cents per share. The offer was oversubscribed. My jocular statement on 4/21 that I guessed Norwegian would price the offering at 10 cents per share now looks clairvoyant.

If all parties in the Norwegian deals act as expected, the airline can now slip into what it calls "hibernation," running a handful of intra-Norway routes "on behalf of the government to ensure that vital connectivity [is] maintained between regions" with 7 planes (compared to a fleet of 160 planes pre-hibernation) and then attempt to ramp up operations in the spring (though it will likely need another cash infusion to make that happen).

https://www.yahoo.com/news/norwegian-airs-april-passenger-count-061158575.html

Posted by
2017 posts

Interesting numbers from the above article:

  • "The equity sale and debt conversion will lead to a massive dilution of the current owners' stakes, however, increasing the number of shares in Norwegian to around 3.5 billion from just 163.6 million."
  • "The airline carried 41,311 passengers last month, down from 3.14 million in April 2019, Norwegian Air said earlier on Thursday."
Posted by
39 posts

I wonder when they'll get around to cancelling my non-refundable September flight from Denver to London...

Posted by
189 posts

Laurie, we had a flight from SFO to Barcelona on June 3rd and we received the cancellation notice on May 4th, so I'd say about a month before. They make it very easy to apply for a full refund online. You won't have to call Norwegian, etc.

Posted by
189 posts

Dave, thank you for the latest developments. I sure hope Norwegian will be able to step up on their long-haul flights one day.