Icelandair Group is in the final stages of talks with its stakeholders on an offering of new shares and the completion of financial restructuring, while compensation negotiations with Boeing are "at an advanced stage", the company revealed in an update on July 31.

The Icelandair parent has completed "fully documented agreements" with the majority of creditors, while final agreements with the remaining creditors are expected to be fully documented this week, it said.

These deals will be conditional on the upcoming share offering being completed and the company agreeing a government-guaranteed credit facility.

"The negotiations with creditors have focused on restructuring cash outflows to match expected future cash inflows. The creditors' concessions will be vital in ensuring the flexibility of the company for a strong resurgence when markets start to open up again," the Icelandic holding said.

Icelandair Group, which also includes Icelandair subsidiaries Air Iceland Connect and Cabo Verde Airlines' venturist Loftleidir Icelandic, has already completed long-term collective-bargaining agreements with unions representing its pilots, cabin crew, and maintenance workers.

Meanwhile, discussions on the terms of a credit facility guaranteed by the Icelandic government, to be provided by state-run banks Islandsbanki and Landsbankinn, are also at an advanced stage, according to the statement. The facility will also be conditional on a successful share offering.

Once the agreements with all creditors are completed, Icelandair intends to publish an information memorandum for potential investors in the share offering, after which a prospectus will be made available. The offering is expected to be finalised by the end of August, it said.

The negotiations with Boeing concern additional compensation Icelandair "expects" for its losses from the global grounding of the B737 MAX aircraft and future deliveries.

Icelandair took delivery of five B737-8s and one B737-9 before the March 2019 grounding. It had also expected one more -8 and two more -9s for delivery in 2019. Facing the absence of nine aircraft in total, it was forced to retain twenty-three B757-200s for the 2019 high season compared to an original plan of 19. It also operated with no spare aircraft and had to wet-lease five aircraft.