Originally Posted by
ManaAdaSystem
Not long. They have produced a report that claims it will be of benefit to Norway if they pay 12 billion. Not sure if they mean a direct payment to Norwegian or a loan guarantee. I’m pretty sure what they hope for.
The parts of the company that suffers the most are the longhaul parts. That was true even before Corona. Selling tickets below cost will always be popular with the public, but this is putting pressure on everybody else. That was probably what they meant to do.
This company is already split into pieces. Just kill the relevant AOCs and keep the core.
Debt to shares in order to take on more debt, and no guarantee of a profitable future even if they can pull this off. The investors must be thrilled.
Incorrect. The debt will be massively decreased.The equity will be a lot healthier. Which is the purpose of the whole exercise, and this is why the Norwegian government put the demands fourth in the first place,in order for Norwegian to secure the loan guarantees. Simply put as a means to put pressure on it's creditors but also for Norwegian to emerge as a healthier entity.
A very interesting scenario will happen if Norwegian survives because it's competitor in Scandinavia,SAS, is heading in much the same direction as Norwegian before the crisis hit. Extremely low equity, high debts(more than 52 billion Swedish kr!!)and more loans will not solve the situation (Loans dont up the equity, ask Kjos) so the worst thing that could happen for SAS right now, is facing a restructed and almost debt free Norwegian. That scenario is becoming very real, IMHO. I think the SAS management are acutely aware of the danger, because the last couple of years have seen a dramatic decrease in the T and C in SAS, forced part time for upgrades, shocking low wages and fully variable rosters. A real shame...see the SAIL thread for more