The airline Norwegian Air is seeking support from shareholders to be able to issue even more shares to raise enough capital to survive the pandemic crisis, according to the annual report presented on Tuesday.
"The Norwegian Board of Directors proposes that the meeting on June 26 approves expanded opportunities for management to issue new shares and convertibles," Norwegian writes, adding that new share issues can expand capital by up to 50 percent.
If the pandemic's damaging impact on the aviation industry through the travel restrictions that have been introduced continues to remain "dormant" even after 2020, the company predicts that working capital of around SEK 2.2 billion will be required in the second quarter of 2021, according to the report.
Discussions are underway between the company and creditors about overdue payments for, among other things, fuel cost hedging and the order book - both Airbus and Boeing are involved.
Norwegian recently completed its debt-to-equity plan and issued shares worth NOK 12.7 billion to secure a NOK 3 billion loan from the Norwegian government. However, the ongoing uncertainty may lead to further issuance, according to the annual report.
One consequence of the capital restructuring was that the share of Norwegian's former owners was greatly diluted by the issues made to save the company. The former owners' share of the company now amounts to 5.2 percent, and a number of aircraft leasing companies to which Norwegian had debts have become major owners, among others.
Almost two weeks ago, Norwegian wrote in a so-called trading update that it remains unclear when the aviation industry as a whole can return to normal operations after the pandemic, but CEO Jacob Schram claimed in a statement that Norwegian is well positioned for the market to open once the quarantines are lifted.
”"There is no doubt that leisure travel will bounce back ahead of business travel and we will be perfectly positioned both strategically and geographically to take advantage of this," writes CEO Jacob Schram.
Around 80 percent of Norwegian Air's employees have been directly affected by the crisis.
Norwegian shares fell 3.6 percent to 4.34 Norwegian kroner on the Oslo Stock Exchange at 3:30 p.m. on Tuesday.
Source: Direct News Agency
