Norwegian will seek to raise NKr1.3 billion ($353 million) through a share issue to strengthen its balance sheet and increase its "financial flexibility".
The move is designed to support the carrier's efforts to shift its strategic focus from "growth to profitability". Norwegian, preliminary figures for which show posted an EBIT loss of around NKr3.8 billion for 2018, is also planning to reduce its capital expenditure by divesting aircraft and postponing some deliveries.
“Norwegian has been through a period with significant growth. Focus going forward will increasingly be on cost savings and CAPEX reductions," says chief executive Bjorn Kjos. "We will now get in place a strengthened balance sheet that supports the further development of the company."
The Scandinavian carrier says the rights issue, which is subject to certain conditions is "fully underwritten" in order to ensure equal treatment of its more than 16,000 shareholders.
The carrier says the equity raising exercise is designed to give it "headroom to the covenants of its outstanding bonds" compared with the company’s existing business plan.
The Oslo-based carrier says the largest shareholders, chief executive Bjorn Kjos and chairman Bjorn Kise, have committed to subscribe to Nkr343 million of the shares, with NKr300 million acquired through HBK Holding and NKr 43 million through Sneisungen.
The carrier says certain other "larger shareholders" have pre-committed and underwritten NKr 267 million.
Norwegian says that only a "few" shareholders have been invited to participate ahead of the public issue of the shares, which will take place on 5 February, but adds that additional shareholders have indicated their "support" for the issue.
The remaining Nkr2.4 billion of the rights issue is underwritten by DNB Markets, a part of DNB Bank, Danske Bank and Sterna Finance, a company indirectly controlled by trusts established by Norwegian oil and shipping magnate John Fredriksen
Norwegian says DNB Markets has been retained as sole global coordinator and joint bookrunner for the rights issue. Arctic Securities and Danske Bank are acting as joint bookrunners for the rights issue.
The company plans to call an extraordinary general meeting around 19 February to table the rights issue. Investors representing 33% of the shares have undertaken to vote in favour of the rights issue at the EGM, while other shareholders have also indicated support, it adds.
The terms of the rights issue, including the subscription price and the number of shares to be issued, will be proposed by the board of directors and are expected to be announced on or about 18 February 2019.
The airline is proposing a subscription period for the rights issue to begin around 22 February and conclude on approximately 8 March.
Norwegian says certain "large shareholders" are calling for more representation on the airline’s election committee at the next annual general meeting, and its articles of association be changed so chairman Kise be removed as a permanent member of the committee.
The low-cost carrier says HBK Holding, its largest shareholder owned by Kjos and Kise, supports the proposal.
Source: Cirium Dashboard
