Norwegian's board of directors on Thursday presented a new business plan in its bid to get the company back on its feet. Among other things, the company plans to scrap long-haul flights and instead focus on the Nordic region. In addition, a new share issue is pending to reduce debt.
According to the proposed business plan, Norwegian will offer a European long-distance route network, with domestic flights in Norway, flights in the Nordic countries and between the Nordic countries and other important destinations in Europe. In total, Norwegian plans to have around 50 aircraft in operation in 2021 and gradually increase to around 70 aircraft in 2022.
The company therefore plans to discontinue its long-distance operations.
”"Norwegian's entire Dreamliner fleet has been parked since March 2020 and there is great uncertainty about demand for long-haul routes going forward. Under such conditions, Norwegian's long-haul operations are not sustainable and the company has therefore decided to discontinue them," the company said in a press release.
As a result of that decision The boards of directors of the subsidiaries, which mainly employ long-distance employees in Italy, France, the UK and the US, have contacted insolvency practitioners.
Through the new business plan, Norwegian hopes to reduce its debt to around NOK 20 billion. At the end of September, the debt was NOK 48.5 billion.
As part of that, the company will raise 4.5 billion Norwegian kroner in new capital through a combination of a new share issue to existing shareholders, a directed new share issue to new shareholders and other forms of equity. According to a stock exchange release, current owners will have around 5 percent of the company after the restructuring.
”"The company has received concrete interest in participating in the new issue. Norwegian has also recently resumed dialogue with the Norwegian government regarding possible state participation based on the new business plan," Norwegian states.
The Irish reorganization process and the Norwegian reconstruction are continuing as planned. The plan presented on Thursday is subject to approval in both processes, support from creditors and subsequent court approval.
Norwegian's shares fell more than 3 percent in early trading on the Oslo Stock Exchange on Thursday. The share price is down more than 98 percent over the past twelve months.
Source: di.se
