Debt restructuring plans: Airline Norwegian agrees with creditors

The low-cost airline Norwegian, which is threatened with bankruptcy, has been given the green light by its creditors for a rescue plan.

After days of negotiations, the fourth and final group of creditors also agreed to the debt restructuring plans, the airline wrote in a statement to the Oslo Stock Exchange.

This is a step closer to a government loan package that is crucial to getting Norwegian through the crisis, said company CEO Jacob Schram. The main priority now is to reach an agreement with the aircraft owners before a special general meeting on Monday.

Norwegian had been working for some time to raise new equity as required by the government loan package. A key part of the plan was to get bond holders to convert larger portions of the loans into shares. At Monday’s special meeting, Norwegian shareholders are expected to decide whether to approve the bailout plan.

In the wake of the Coronavirus pandemic, Norwegian, like many other airlines, is facing a significant drop in demand. Norwegian shares have plummeted since the beginning of the Corona crisis, with around 7650 employees on temporary leave. Four Danish and Swedish subsidiaries of Norwegian, which employ the pilots and cabin crew, have already filed for bankruptcy.

Even before the advent of the coronavirus, the Norwegians had financial problems: a rapid expansion since the company was founded in 1993 had always brought with it high costs and thus larger debts. Last year, the airline also had considerable trouble with the Boeing 737 Max 8 crash jet.