BREAKING: Cash-strapped Norwegian enters examinership
Amidst a cash-crunch situation, Norwegian Air Shuttle shares have been suspended from trading on the Oslo Stock Exchange.
The Oslo Stock Exchange announced that share trading for Norwegian Air Shuttles' shares were halted “in anticipation of an announcement from the company,” on November 18, 2020. The low-cost carrier was one of the worst-hit airlines amidst the current pandemic, as it entered the current crisis with an already fragile financial situation.
Its shares were placed under special observation in the exchange, indicating that the “pricing of the shares is particularly uncertain,” indicated the Oslo Stock Exchange. On November 17, 2020, Norwegian’s shares were traded at an all-time record low, closing at NOK0.49 ($0.054). Throughout November 18, the share price plummeted to its lowest point at NOK0.43 ($0.048).
Despite restructuring and state aid granted by Norway, the worsening crisis has not allowed the airline to resurface in a stable and healthy financial situation. Norwegian asked for more government aid, yet was denied by the lawmakers.
“The fact that our government has decided to refrain from providing Norwegian with further financial support is very disappointing and feels like a slap in the face for everybody at Norwegian who is fighting for the company when our competitors are receiving billions in funding from their respective governments,” stated Jacob Schram, the chief executive officer (CEO) of the company on November 9, 2020.
The very same day the airline furloughed 1,600 of its employees and parked 15 out of 21 aircraft that have been active throughout the past few months.
“The company currently estimates that it will need additional working capital during the first quarter of 2021 to meet its obligations in the upcoming twelve-month period,” read Norwegian’s Q3 2020 financial report, released on November 10, 2020. “Nevertheless, considering the uncertainties and recent developments described above, the directors have concluded that there are realistic alternatives for the company to continue in operational existence.”
UPDATE 18-11-2020, 5:46 PM (UTC +3) Norwegian announced that the airline has entered an examinership process in Ireland relating Norwegian Air International Limited (NAI), its wholly-owned asset company Arctic Aviation Assets DAC (AAA) and some of AAA’s subsidiaries.
"Norwegian has chosen an Irish process since its aircraft assets are held in Ireland," argued the airline in an announcement on the Oslo Stock Exchange.
The examinership process in Ireland is the equivalent of Chapter 11 bankruptcy proceedings in the United States, where the company continues to operate yet is protected from its creditors for the next 100 days. Norwegian believes it has enough cash to outlast the 100 days.
"It is important to note that due to the Covid situation, several transportation companies have initiated variations of such examinership processes with a positive outcome for customers, employees, shareholders and other stakeholders. Norwegian is therefore confident that it too will successfully emerge as a stronger and leaner airline ready to meet renewed airline travel demand in 2021 after the Covid pandemic subsides," read a statement by the airline.
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