Norwegian Air shareholders have approved radical restructuring to the budget airline’s business profile, as senior executives look to steer the company through the COVID-19 downturn.
According to the Norwegian Broadcasting Corporation:
- 96.47 per cent of shareholders voted in favour of a capital issue where current shareholders have preferred allocation;
- 95.47 per cent supported the conversion of bond debt into shares; and
- 95.32 per cent supported the conversion of leasing debt into shares.
Though the national government announced US$542 million in rescue funding for the country’s aviation sector on 19 March, included were a number of stringent conditions, such as debt-to-equity ratios.
By making these structural changes, Norwegian believes that it is now able to meet conditions to unlock these government funds.
“There is still a lot of work ahead of us,” cautioned Norwegian Air CEO Jacob Schram. “This is where we are going to take it from strategy to implementation.”
The announcement could not have come sooner for the cash-strapped carrier. According to Reuters, without approval for the debt conversion plan Norwegian was set to run out of cash by mid-May.
On Sunday, company officials announced that they had secured support from a sufficient majority of bondholders to proceed with the US$1.2 billion swap.
Norwegian stocks surged in value Monday briefly, reaching a high of US$0.62 from US$0.49.
