Norwegian Makes Restructuring Offer to Creditors
Norwegian has submitted its final restructuring offer to its creditors in what is seen as a major plan to cut its debt and reduce its fleet size in a bid to survive after the pandemic. If the submitted scheme is agreed by the Irish High Court and enough of the creditors, it is expected to enable Norwegian to raise new capital and allow it to emerge next month from court-provided bankruptcy protection.
Speaking on the proposals, Jacob Schram, CEO of Norwegian, said: “We have had many constructive and challenging negotiations with creditors since the indicative plan was presented on January 14th. The Examiner in Ireland and the Reconstructor in Norway both believe that this plan is in the interest of the creditors and shareholders of the company. This is an important milestone in the process of securing Norwegian’s future.”
The Examiner will firstly present formal proposals for the restructuring based on the plan presented to the creditors of the company. Following the necessary creditor meetings the proposals will then be presented to the Irish High Court for approval. Unsecured creditors who will not participate in the planned capital raise, will be entitled to cash and a dividend totalling around five percent. The dividend claims may be converted to shares, in total representing approximately 25 percent of the company’s share capital following the restructuring. New investors in the capital raise will receive approximately 70 percent of the post-restructuring share capital, and current shareholders approximately five percent.
A decision from the High Court is expected in the next few weeks as meetings with the creditors is expected to take place between 18th-20th March. Norwegian has also recently agreed to exit its deal to purchase Airbus narrow-body aircraft. However, three separate contracts with Boeing for up to 97 aircraft are to be decided in the US courts at a future date.
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