Norwegian Air plans to convert up to US$4.3 billion of its debt into equity and to issue new shares as it seeks to stay in business following the COVID-19 outbreak that has grounded almost all of its fleet, the budget carrier said on Wednesday.
On March 16, the company announced temporary layoffs of 7,300 employees, about 90per cent of its workforce, and the following day called on Norway's government for help, saying it needed cash"within weeks, not months". If approved, Norwegian would convert part or all of its bonds worth 5.68 billion crowns into shares as well as leasing debt of up to 38.82 billion crowns, the company said.
Asset manager Sissener AS, which holds bonds in Norwegian with a nominal value of US$5 million, but also shorted some stock, said creditors may have few options but to accept the proposal. The stock has plunged almost 80per cent over the past two months as the crisis has engulfed the airline industry and deepened Norwegian's existing financial difficulties.
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