Air transport A surprise turn: The Norwegian state promised to support Norway, which is raging in deep trouble

The state is participating in the airline’s share issue, in which the company is trying to raise SEK 4-5 billion in new capital. Norwegian applied for corporate restructuring as early as last spring, but the money ran out again at the end of the year.

21.1. 10:26

Norwegian after a long twist, the state has tended to support the airline Norwegian by investing capital in the planned share issue. The aid is subject to conditions which the airline does not specify in its bulletin.

Norwegian had to apply for a corporate restructuring last April, in which its creditors acquired 95 percent of the company’s ownership. However, the company’s cash flow dwindled rapidly and last autumn it applied for a new restructuring arrangement through its Irish subsidiary. The Irish company controls the company’s aircraft holdings.

The airline also begged for help from the Norwegian state in the autumn, but in October it refused to assist the company, which was indebted to oversized expansion. Last spring, the state guaranteed a loan raised by the airline as part of the first corporate restructuring.

Short a week ago, Norwegian announced a new business plan that will reduce its fleet of more than a hundred aircraft to just 50 aircraft. The service is to continue only on the Norwegian and European routes and long-distance traffic will end completely.

Norwegian’s management plans to reduce the company’s debt in the new restructuring to approximately SEK 20 billion, or just under EUR 2 billion. In addition, the company would be capitalized with a share issue of SEK 4–5 billion, or approximately EUR 400–500 million.

The release does not state how much of this amount is to be received from the Norwegian state. At the same time, in any case, the State would also receive a significant shareholding in the company.

The Norwegian state did not own any shares in Norwegian before the crisis. Norway has once been a shareholder in SAS, but this ownership was also given up by the state years ago. Most airlines’ home countries have had to support their national airlines through the crisis. The Finnish state has also assisted Finnair with large sums.

There are probably still curves in the way of the plan. For example, the aircraft market is currently, and probably long after the crisis, in a very weak position, as the collapse of air traffic has left a large part of the world’s aircraft unused. In this way, it can be difficult for Norwegian to get rid of its planes at least at the same price as it has paid for the planes in its time.

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