Low-cost carrier Norwegian Air obtains government loan
COPENHAGEN, Denmark (AP) – Low-cost carrier Norwegian Air Shuttle said on Wednesday it would get 3 billion crowns ($ 290 million) in government loan guarantees as part of its restructuring plan.
He said he converted 12.7 billion crowns ($ 1.3 billion) of debt into equity, an operation needed to secure loan guarantees from the state. Norwegian CEO Jacob Schram said that despite the loans, “the coming months will be demanding as uncertainty in the industry remains high”.
He said the carrier was dependent on creditors now that “virtually all sources of income have ceased”.
“Our goal is not only for Norwegian to survive, but for us to come back stronger with a sustainable operation and a structure that will benefit shareholders, customers and colleagues alike,” said Schram.
The Norwegian government has confirmed that the bailout agreement has been reached, according to the NTB news agency.
As part of the restructuring, BOC Aviation, controlled by the Chinese government, took 12.67% of the outstanding shares and votes of Norwegian Air.
The airline, whose fleet is now mainly immobilized because the pandemic has caused an almost total halt to travel around the world, has temporarily laid off around 90% of its workforce and will continue to implement additional cost-cutting measures.
Last month, four of the airline’s Danish and Swedish subsidiaries filed for bankruptcy.