Low-cost carrier Norwegian has sent its plan for financial restructuring to the Irish and Norwegian courts, as it seeks permission from creditors and shareholders to continue the remodelling of its business and initiate a capital raise.
The examiner in Ireland will now present proposals for the restructuring based on the plan, which will then be passed to the Irish High Court for approval.
Norwegian is hopeful that the Irish court will make its decision within the next couple of weeks, after which the plan will be dealt with by the reconstruction process in Norway.
In November, Norwegian entered into an examinership and restructuring process which it hopes will enable it to reduce its fleet, cut its debt and secure new capital as part of its transformation into a domestic and European short-haul carrier.
It has previously warned that without a successful exit from the process it would be “highly likely that the company will enter into liquidation and/or bankruptcy proceedings during the second quarter of 2021”.
Norwegian is proposing that unsecured creditors be entitled to cash and dividends totalling around 5%, which is likely to be converted to stock representing around 25% of the company’s share capital.
New investors in the capital raise will receive approximately 70% of the post-restructuring share capital, and current shareholders around 5%.
“We have had many constructive and challenging negotiations with creditors since the indicative plan was presented on 14 January,” states Norwegian’s chief executive Jacob Schram. “The examiner in Ireland and the reconstructor in Norway both believe that this plan is in the interest of the creditors and shareholders of the company,”
He adds: “This is an important milestone in the process of securing Norwegian’s future.”
The carrier says that despite discussions with the examiner and the reconstructor, it has proven “impossible” to reimburse the outstanding 2% of customer refund claims for flights booked before it entered the process.
