Icelandair Group's planned share offering and government-backed loan facility have been delayed by ongoing restructuring talks with lessors, a credit card acquiring bank, and Boeing, it outlined in a statement on June 29.
The group "has to date achieved positive progress with many of its stakeholders," it said, while new long-term collective-bargaining agreements have been reached with unions representing pilots, cabin crew, and mechanics.
Work on terms with the Icelandic government along with the state-owned banks Íslandsbanki and Landsbankinn on a government-guaranteed credit facility is in progress. Still, the facility is conditional on the company receiving "sufficient concessions" from creditors and the successful conclusion of the planned share offering, the Icelandair (FI, Reykjavik Keflavik) parent said.
"Icelandair Group has received positive feedback from most of its creditors, who remain willing to work with the company through this process. However, negotiations with certain pivotal counterparties have not been concluded," the statement continued, adding that these counterparties include lessors and a credit card acquirer.
Icelandair is also still negotiating with Boeing over further compensation due to the grounding of the B737 MAX and the state of future aircraft deliveries.
If agreements can be completed with the remaining stakeholders in July, the company intends to initiate an offering of new shares in August - a delay from the previous plan to start now. But if the negotiations are unsuccessful, the group will need to initiate a new phase of restructuring - without the government-guaranteed loan.
Such a process could last for up to 12 months, and in this case "the company would be required to seek deferral of any payments to financial creditors." The company's cash position is currently around USD150 million, it concluded, in addition to three-month fixed operational costs.
