Clock ticks for Norwegian as it asks for more time to repay loans

Tuesday, 03 Sep, 2019 0

Low-cost airline Norwegian will find out in less than two weeks whether its attempt to secure more time to repay $380 million of borrowings has been successful.

The airline has offered to put up its valuable take-off and landing slots at Gatwick as collateral to extend the time in which it is supposed to pay back the loans.

One loan is due to mature in December, and the other in August 2020. The airline, which is the third largest at Gatwick after British Airways and easyJet, has asked for the loans to be extended to November 2021 and February 2022 respectively.

A bondholders’ meeting will take place on September 16.

"What we are doing now is to make sure that we have sufficient liquidity for the next twelve months," said interim chief executive Geir Karlsen, who took over when Bjorn Kjos, one of the airline’s founders, stepped down in July.

One city analyst, Daniel Roeska at Bernstein, told CNN Business: "They are managing the crisis as best they can but they are on the verge of a cliff edge."

However, analyst Jacob Pedersen at Sydbank said it was ‘a fine solution to the issue’, adding: "We have to see whether the bondholders will think the same."

Norwegian has been hit with several problems recently, including the forced grounding of its fleet of Boeing 737 MAX jets after the aircraft type was involved in two fatal crashes.

With no news yet on when the aircraft will be airborne again, Norwegian announced last month that it was axing all of its transatlantic flights from Ireland.

And it revealed yesterday that payment delays from credit card companies reduced its working capital by around $439 million in the second quarter of this year, compared to the same period of 2018.

The delay wiped out the $353 million it raised in a share issue in March, as well as the $102.6 million it made from its recent sale of a stake in a Norwegian bank.

If bondholders refuse to extend Norwegian’s debt, the airline could be forced to reconsider selling to a bigger player.

It has previously received – and rejected – takeover offers from British Airways’ parent IAG and from Lufthansa.

Linsey McNeill

Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk

Located in the Mediterranean and connecting Asia and European continents that are separated by the famous Bosphorus, Türkiye is a...

Hilton is a leading global hospitality company with a portfolio of 22 world-class brands comprising nearly 7,300 properties and more than 1.1 million rooms, in...

Our Mission Ecommerce has transformative powers, and we believe everyone should be able to take part. But outdated solutions and...

Consisting of the three Maritime provinces of New Brunswick, Nova Scotia, and Prince Edward Island as well as Newfoundland and...

AXA Assistance specializes in best-in-class cost containment, health and travel services. Over 60 years of experience combined with a US and...

MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment company with national and international locations featuring best-in-class hotels...

ITB Asia, Asia’s Leading Travel Trade Show, is an annually held B2B trade show and convention for the travel industry; it is designed...

It’s easy to find perfection in Santa Barbara, but what if there was even more of your favorite finds, activities,...

Centara Hotels & Resorts is Thailand’s leading hotel operator. Its 93 properties span all major Thai destinations plus the Maldives,...

Queensland – where it’s rude not to stare Here in Queensland, there’s plenty to do. But there’s even more to...

Babble is a leading technology business that is reimagining how we do work. Founded in 2001, the company works with...

NSW, Australia Welcome to New South Wales – a place to feel free, feel alive, feel new. As the official...

From the Tel Aviv beach scene to the shores of the Dead Sea, Israel layers diverse cultures, outdoor adventures, and...

At Wilderness Safaris we believe in creating life-changing journeys and have been doing so for over 39 years. Our purpose...

To say Sweden is fit for a fairy tale is not overstating it—the palaces dazzle, the boreal forests are brimming...

With long periods of Thailand’s History, according to evidences and studies, Sukhothai was the first kingdom of Thailand. At that time, an early Thai...