Norwegian Air proposed on Thursday to convert debt into shares, ditch planes and sell new shares in an attempt to survive the COVID-19 pandemic, which has brought the company to its knees.
As part of the plan, the Oslo-based airline, which recently filed for bankruptcy protection in an Irish court, intends to raise up to NOK 4 billion ($455.4 million) from the sale of new shares or hybrid instruments, Norwegian said in a statement, Reuters reported.
“The company asks for the continued support of its shareholders to prepare future capital increases in parallel with the restructuring of its balance sheet”.
It will also try to pay lessors only for the use of the aircraft when they are actually in use, per hour, until 2022.
Prior to the pandemic, Norwegian helped transform transatlantic travel, expanding the business model of European low-cost airlines to longer-haul destinations, but also made losses each year from 2017 to 2019.
By cutting its fleet and reducing its debt burden, Norwegian believes it can make itself attractive to new shareholders and potentially attract financial support from the Norwegian government, which has so far refused requests for further assistance.
Only six of the company’s 140 aircraft are currently in use, while the remaining 134 are on the ground due to the pandemic, including the entire fleet of Boeing 787 Dreamliners used for its currently suspended transatlantic flight program.
The company did not specify how many aircraft it intended to sell.
By Tracy Rucinski; Edited by Tim Hepher and Mark Potter.
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