Norwegian Air’s chances of surviving the COVID-19 pandemic were given a boost on Friday, January 22, when Ireland’s High Court granted an extension to its protection from creditors following a request from the official overseeing the process.
Norwegian was given protection from bankruptcy in both Norway and Ireland, where most of its assets are registered, late last year and is aiming to emerge from the process with fewer aircraft and less debt.
The extension to February 25 was granted after a lawyer representing the Irish examiner overseeing the process told the court the budget carrier had a reasonable prospect of survival.
Norway’s government backed the airline’s survival plan on Thursday, January 21, saying it would stump up cash if private investors did too.
“I will grant that application and extend the time for reporting…to the 25th of February,” Justice Michael Quinn told the court.
Norwegian plans to end its long-haul service and will initially cut its fleet to about 50 aircraft from the current 138 as part of a restructuring plan presented last week.
It has been forced to ground all but 6 of its aircraft due to the pandemic and will now focus on Nordic and European routes.
The company had debts and liabilities of 66.8 billion Norwegian crowns ($7.9 billion) at the end of the September, and plans to reduce that to around 20 billion as part of its revamp.
To approve the restructuring, the Dublin court must be convinced that Norwegian Air continuing in business is better for creditors than a winding up of the company.
While the outcome is also subject to approval by a court in Oslo, the Irish process is seen as taking precedence as most of Norwegian’s assets are registered to Irish subsidiaries.
A hearing to consider the repudiation of some of Norwegian’s liabilities will be heard by the Irish High Court on January 28.
Under the parallel Norwegian process, details of the proposed restructuring will be presented to creditors on January 27, with a binding vote to follow on a later date. – Rappler.com