Norwegian has raised NOK 2.5 billion in gross proceeds through a private placement and a convertible bond issue of $150 million. After the completion of the transactions, Norwegian states that it is fully funded through 2020 and beyond.
The capital raise was completed on November 5 through a private placement and a convertible bond issue. Both the private placement and the convertible bond issue received significant interest and were oversubscribed, according to the airline.
“The capital raise will secure required financing of working capital during the winter season and create financial headroom as the company moves from growth to profitability The actions we are now taking will enable us to embark on the next chapter of Norwegian, to the benefit of all shareholders, customers and employees,” said acting CEO Geir Karlsen.
The completion of the capital raise is subject to the resolution by the company's extraordinary general meeting expected to be held on November 27.
Norwegian reiterated the impact its change in strategy from growth to profitability has had on the airline, namely the increase in its third quarterly results and reduction in capital expenditures, mainly due to the restructuring of aircraft orders.
Norwegian has also recently established a joint venture with China Construction Bank Leasing International Corporation DAC, which reduces capital commitments in 2020 to 2023 by another NOK 13.7 billion. The airline has sold 24 aircraft with delivery in 2019 and 2020 with net liquidity effect of NOK 2.2 billion. It sold shares in Norwegian Finans Holding ASA for a total NOK 2.2 billion, while the maturity of its unsecured bonds has been extended with two years compared to original maturity dates. The company has raised the full-year target for the cost reduction program #Focus2019 to NOK 2.3 billion, and it has announced the intent to enter into a partnership with JetBlue to build feeder traffic in the US market.