Norwegian Air nears rescue deal after winning debtor support

STOCKHOLM • Norwegian Air Shuttle ASA struck a deal to swap about US$1 billion (RM4.32 billion) in debt for equity in last-ditch talks with bondholders and lessors, taking it one step closer to securing state loan guarantees needed to see it through the coronavirus outbreak.

The guarantees are “crucial to getting through the crisis”, Jacob Schram, the discount carrier’s CEO, said on Sunday after the accord with bondholders. Norwegian has also now received “strong support” from plane-leasing firms, it said yesterday ahead of a shareholder vote on the survival plan.

Shares of the airline, down 86% this year, remain suspended until the outcome of the shareholder meeting has been made known.

Norwegian Air was already battling to stay in business before the coronavirus struck after piling up a debt mountain funding one of the European airline industry’s most rapid expansions. The debt-for-equity exchange is part of a plan to meet terms set by Norway to access to the bulk of a three billion krone (RM1.2 billion) package of loan guarantees.

The carrier won support from lessors for a minimum conversion to equity of US$730 million, up from the previously announced US$550 million. — Bloomberg