The Norwegian airline Flyr, founded by Erik G. Braathen two years ago, collapsed on the Oslo Stock Exchange after being forced into a new share issue.
Just a few days ago, one of competitor Norwegian's major owners took a short position in Flyr in the belief that the stock would fall.
When the corona pandemic was at its worst in the summer of 2020, Erik G. Braathen, former board member of Norwegian and CEO of Braathens, took the opportunity to start a new airline with the ambition of taking a share of the Norwegian passenger market.
The company went public in March 2021, but the share price has been very dismal since then. On Thursday, the stock plunged another 55 percent after the company announced that it was forced to issue new shares to fill its coffers.
In total, the company will raise 430 million Norwegian kroner in a so-called "crisis issue" where the subscription price is set at 1 öre per share. After Thursday's crash, the share is trading for 12 öre.
”The price per share has been set low to highlight that this is a restart,” says Flyr CEO Tonje Wikstrøm Frislid in a comment according to E24.
The company also plans to carry out an additional issue of SEK 100 million directed at existing shareholders.
On Thursday, Flyr also released its report for the third quarter, which showed sales of SEK 610 million and a net loss of SEK 453 million.
Notably, competitor Norwegian's major owner Sundt AS, which is owned by investor Helene Else Sundt and her brother Christian Sundt, has speculated on a price drop for Flyr. Just a few days ago, they took a short position in Flyr corresponding to 0.51 percent of the shares, writes Dagens Næringsliv. Considering that the issue price is set at 1 öre, the short sale looks to be very successful.
Flyr shares have plunged by over 97 percent since their listing last spring. The shares are traded on Euronext Growth, which can be compared to Sweden's First North, in Oslo. Erik G. Braathen is the largest owner of Flyr with 8.5 percent of the shares.
The company flies domestically in Norway, but also to a number of major cities and tourist destinations in Europe.
Source: DI.SE
