Ailing Nordic carrier Norwegian is negotiating a $1.2 billion debt-for-equity swap with its bondholders as it looks to meet requirements to access the state aid package.
Norwegian is looking to covert 60 percent debt to equity in respect to bond issuances NAS07 and NAS08, and 85 percent debt to equity in respect of the CB.
Norwegian has has agreed to a minimum threshold of lessor concessions of $500 million with an aim to get the total debt to equity conversion from lessors and bondholders up to USD 1.2 billion.
Under the proposals current shareholders would be almost wiped out, retaining just 5.2% of the share capital in the company post debt to asset conversion but before the proposed equity issue.
The restructuring is necessary due to a condition for the Norwegian state aid package of NOK 2.7 billion, which requires the firm to hold a minimum of NOK 300 million of risk capital, which the company plans to implement by way of an equity issue.
Norwegian is looking to raise up to NOK 400 million through a public equity offering.
According to the current timetable, the application period for the Public Offering is expected to commence on or about 5 May 2020 and end on or about 11 May 2020.
According to media reports the debt-for-equity swap was being pursued on the its base case was that its fleet would be grounded until April 2021, apart from the seven aircraft currently flying in Norway.
Norwegian would then start to increase both its European short-haul and long-haul operations to the US and Asia over the rest of 2021 before normal activity returns in January 2022.