Burdened with massive debt after an ambitious expansion program and suffering from the COVID-19 pandemic that has paralyzed global air traffic, Europe’s 3rd biggest no-frills airline is now fighting for its survival.
An Irish court on Monday, December 7, allowed Norwegian to put itself and several Irish subsidiaries – which manage its fleet and some of its routes in Europe – under “examinership,” the equivalent of the United States procedure known as Chapter 11.
The maneuver shields the company from creditors and potential bankruptcy while it tries to restructure its debt.
A specialized Norwegian court on Tuesday also granted it protection.
“A supplementary reconstruction process under Norwegian law will be to the benefit of all parties and will increase the likelihood of a successful result,” Norwegian chief executive Jacob Schram said in a statement.
“Our aim is to secure jobs in the company and to contribute to securing critical infrastructure and value creation in Norway,” he added.
Pending a worldwide rollout of COVID-19 vaccines that could enable air traffic to return to normal, Norwegian last week presented a rescue plan that included slashing its fleet, debt conversion, and a rights issue of up to 4 billion kroner ($453 million, 374.5 million euros).
Shareholders are due to vote on the plan at an extraordinary general meeting on December 17.
The company, a pioneer in the low-cost long haul sector, has been in the red since 2017 and its debt amounted to 48.5 billion kroner at the end of September.
Just 6 of the 140 aircraft it had in service at the start of the year are still flying, on Norwegian domestic routes, while only 600 employees among a formerly 10,000-strong payroll are still at work.
The Norwegian share price, which has fluctuated wildly of late, gained 9.13% in midday trading on the Oslo stock exchange. It has lost 99% of its value in the past year. – Rappler.com