Published on Wednesday, May 20, 2020

Norwegian secures vital state loan following restructure

Norwegian has secured a state loan of around £245 million after successfully completing a restructure of the budget airline.

As part of the process, around £1 billion of debt has been converted into equity.

Norwegian said it had 'laid a solid foundation for the future' but admitted 'the next months will remain challenging'.

CEO Jacob Schram said: "I want to thank everyone who has supported the company during this unprecedented crisis that has affected the entire the airline industry: The Government and Parliament; customers; employees: shareholders; leasing companies; creditors; bondholders, the travel industry and other Norwegian supporters. 

"Now that we can access the state loan guarantee, we can continue to transform the company. Through this process, the belief in New Norwegian and the company's strategy have been confirmed by shareholders, the market, bondholders, leasing companies, other creditors and lenders. 

"Nevertheless, the months ahead will remain challenging and with a high degree of uncertainty for the industry. Norwegian will still need to collaborate closely with a number of creditors as the company currently has limited revenues."

Norwegian began the process of restructuring its operations 18 months ago and claimed it was heading for a net profit this year prior to the coronavirus outbreak, which forced it to ground most of its flights.

The company said it had 'seized this time as an opportunity to restructure and develop a new strategy and business plan - New Norwegian - for a strengthened airline to re-emerge when travel restrictions are lifted and demand returns'. 

"In addition to securing that the company survives this crisis, our goal has been that Norwegian should have a strong position in the future airline industry, with a clear direction and strategy. This will ensure sustainable operations and a structure that will be to the benefit of both shareholders, customers and colleagues," added Schram.

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