Norwegian (DY, Oslo Gardermoen) is aiming to raise NOK6 billion kronor (USD720 million) in fresh capital this month as part of its plan to emerge from bankruptcy protection in Ireland and Norway on May 26. If it succeeds, it expects to have a cash balance of NOK7 billion (USD840 million), it outlined in a statement on May 3.

The capital raise will consist of:

  • an offering of perpetual bonds raising gross proceeds of up to NOK1.875 billion (USD225 million);
  • a rights issue raising up to NOK395 million (USD47 million), offering a maximum of 63,076,638 new shares at a subscription price of NOK6.26 (USD0.75);
  • a private placement of new shares limited to an amount so that the total proceeds from the capital raise do not exceed NOK6 billion.

The company’s shares were trading at around NOK55.20 (USD6.63) on the Oslo Stock Exchange on May 4, so the price of the new shares in the rights issue represents a substantial discount.

Norwegian expects, it said, that its total liabilities on completion of the restructuring will be around NOK16-18 billion (USD1.9-2.2 billion), of which NOK5.8-6.3 billion (USD700-760 million) is aircraft-related debt.

It summarised that it had negotiated and signed agreements to retain four owned and 44 leased aircraft as it reorients its fleet to a short-haul network primarily in Norway, the Nordics, and continental Europe, with an additional three aircraft still being negotiated. All 51 aircraft will be operated based on power-by-the-hour agreements at least until the end of the first quarter of 2022.

Norwegian has already achieved this fleet size, the ch-aviation fleets advanced module shows, including twenty-nine B737-800s, sixteen B737-8s, three B787-8s, and three B787-9s.

The airline said in its statement that it had the support of six “cornerstone” investors namely the asset management arms of Scandinavian banks Nordea and DNB; Geveran Trading, an investment vehicle belonging to the Norwegian-born Cypriot shipping billionaire John Fredriksen; investment firms Sundt and Ludvig Lorentzen; and the Norwegian sovereign wealth fund Folketrygdfondet. The Norwegian government had previously assured that it would take part in the capital raise. The cornerstone investors have undertaken to subscribe for a total of NOK2.855 million (USD344 million) in the private placement.