Low-cost carrier Norwegian Air gets government loan

Three executives of Norwegian Air Shuttle company prepare for a media conference in Fornebu, Norway, with from left, CFO Geir Karlsen, CEO Jacob Schram and Chairman Niels Smedegaard on a video link, following their extraordinary general meeting Monday May 4, 2020. The shareholders approved a crisis package which ensures further operation of the company impacted by the coronavirus. (Hakon Mosvold Larsen / NTB scanpix via AP) (Hakon Mosvold Larsen)

COPENHAGEN – Low-cost carrier Norwegian Air Shuttle said Wednesday it will get 3 billion kroner ($290 million) in loan guarantees from the government as part of its restructuring plan.

It said it had converted 12.7 billion kroner ($1.3 billion) of debt into equity, a move required to get state loan guarantees. Norwegian CEO Jacob Schram said that despite the loans, ā€œthe coming months will be demanding as the industry uncertainty remains high.ā€

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He said the carrier depended on creditors now that ā€œvirtually all of the revenue stream has stopped.ā€

ā€œOur goal has not only been for Norwegian to survive, but for us to come back stronger with a sustainable operation and a structure that will benefit shareholders, customers and colleagues alike,ā€ Schram said.

The Norwegian government confirmed the rescue loans deal was done, according to news agency NTB.

As part of the restructuring, the Chinese government-controlled BOC Aviation has taken 12.67% of the outstanding shares and votes in Norwegian Air.

The airline, whose fleet is now mostly grounded as the pandemic has caused a near-total halt to global travel, has temporarily laid off approximately 90% of its workforce and will continue to implement additional cost cutting measures.

Last month, four of the airline’s Danish and Swedish subsidiaries filed for bankruptcy.


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