However, filings with the Oslo Stock Exchange posted on Norwegian’s investor relations website on January 14, related to a prospectus for a rescue fundraising for the company as part of the recapitalisation, came with strong warnings attached.
“The company is of the opinion that the working capital available to the company is not sufficient for its present requirements, for [at least the next] 12 months. [...] The company estimates that it will no longer have sufficient working capital during the first or second quarter of 2021,” the company said in a securities note.
In a registration document related to the imminent listing on the stock exchange of new shares and perpetual subordinated convertible bonds, it warned: “It is a material risk that the group’s business and operations - both with respect to size and nature - will be adversely changed even if the group is able to conclude the ongoing restructuring.”
If it is unable to conclude the restructuring, “it is a material risk that the group may enter into bankruptcy. Such bankruptcy risk also applies even if the group should be able to conclude the current restructuring.”
It added: “There can be no assurance that the group will be able to generate sufficient cash from its operations and/or obtain new capital to pay its debts or other payment obligations in the future or to refinance its indebtedness in order to be able to service its debt in its ordinary course of business.”
This means that there is “a significant risk that the group will continue to breach its debt obligations and other obligations, and that creditors, as a result, will be entitled to accelerate their claims against the group.” In that case, Norwegian “will in such circumstances be dependent upon its creditors agreeing to waive covenant breaches and other events of default.”
This warning from the Oslo Stock Exchange is hardly encouraging new investment and to exit the Examinership the airline must prove it can survive without breaching the debt agreements or coming to the begging bowl again