Norwegian’s bondholders have accepted a plea by the company to postpone the repayment of bonds worth USD380 million by up to two years, the loss-making airline said on September 16, giving a boost to its share price and providing it with some financial relief.
Separate bondholders’ meetings were held for two unsecured bonds, NAS07 and NAS08, and both voted in favour for the proposed amendments "with sufficient majority", the carrier said.
Two-thirds of bondholders at the meetings in Oslo had to back the proposal for the terms to be altered, and 89.8% of NAS07 bond owners backed the move, as did 99.64% of the holders of NAS08, Reuters news agency reported.
In return, Norwegian said it would pay a premium on the bonds while putting up as security its lucrative take-off and landing slots at London Gatwick.
“We’re pleased with the bondholders’ decision to amend the bonds as it will give us added financial headroom going forward,” acting CEO Geir Karlsen said in a statement. “We believe it demonstrates faith in our strategy and support of the important measures Norwegian is undertaking to return to profitability.”
He added that Norwegian was on track to reach targeted cost-reductions of NOK2 billion kroner (USD223 million) in 2019.
Norwegian haemorrhaged cash during its years of rapid expansion, and this year its change of strategy to put profits over growth has been marred by the global grounding of the B737 MAX as well as Rolls-Royce engine problems on its B787s.
