The airline expects to raise as much as NOK5 billion (US$583 million) in capital, including up to NOK2.5 billion from existing creditors through a hybrid debt instrument, according to an investor presentation. Secured creditors that contribute to the equity raise will boost their holdings, the company said.
Norwegian will also 'rightsize' its fleet through the Irish examinership process and issue fresh equity at the end of February or early March, it said. The write down of leased and financed aircraft assets is set to reduce equity by about NOK10 billion before exiting the restructuring, with all large creditors expected to take losses and their debt converted into equity, according to the presentation.
At the end of the process, new investors, which could include the Norwegian government, will own 70 per cent of the equity. Converted creditors will hold a 25 per cent stake and current shareholders 5 per cent, the company said, according to Bloomberg.
Last week, the carrier was granted an extra five weeks of creditor protection by an Irish court, buying the embattled airline extra time to complete a restructuring aimed at staving off collapse. The discount airline, struggling to survive after the coronavirus crisis stunted international travel, qualified for the Irish procedure via its local divisions Arctic Aviation Assets and Norwegian Air International.
Norwegian, which said this month that it would exit long-haul operations, plans to operate a fleet of 53 aircraft in summer 2021, with the majority of its routes to and from Scandinavian airports, it said in the presentation. It plans to scale up the fleet to 68 aircraft in 2022.
The carrier will operate the aircraft on so-called power-by-the-hour terms until March 2022. These contracts allow it to only pay for aircraft when it flies them. The future use of the Boeing 737 Max, which was cleared recently to return to European skies by the region's aviation safety regulator, will be 'clarified' in the restructuring.