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Hard times for Norwegian

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Hard times for Norwegian

Old 15th Jan 2021, 19:46
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With this action anyone owed money by the leasing arm has less than no chance of recovering it unless any assets can be sold, but major creditors are in the poo...and so the dominos fall:

https://www.irishtimes.com/business/...pany-1.4459344

As for investment in "Hybrid Instruments" once bitten, twice shy comes to mind. Cash for equity/shares only works were a stable base share price can be established, and the shares have fallen heavily in the last 24hrs. In the mean time the Gatwick crews face loosing the Furlough payments after the liquidation.
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Old 15th Jan 2021, 22:34
  #1122 (permalink)  
 
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So they want to print a hexx of a lot more shares, and want their leased 737s to operate on a pay per hour contract. This in order to have flexibility in the ramp up. Who is going to pay for this? The leasing companies.
They want everybody else to pay for their own mistakes. Shareholders, banks, leasing companies, employees, states, taxpayers. They don’t want to pay for anything, just expect the debt to go away. And free money from the Norwegian Government.
Money or repo man, that would have been my answer if these aircraft were mine.
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Old 16th Jan 2021, 06:10
  #1123 (permalink)  
 
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And where exactly would these repo'd aircraft be placed afterwards? You see, this is the issue right now. The cost involved to repossess and leave in storage is way more costly than a pay as they fly concept.

That is the dilemma for leasing companies the world has changed and one simply cannot place hundreds of machines with capacity hungry carriers any longer.
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Old 16th Jan 2021, 07:00
  #1124 (permalink)  

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Originally Posted by ManaAdaSystem
Who is going to pay for this? The leasing companies. They want everybody else to pay for their own mistakes. Shareholders, banks, leasing companies, employees, states, taxpayers. They [Norwegian] don’t want to pay for anything, just expect the debt to go away.
Isn't it a bitter reality that the company indeed will not pay as there is no money (sufficient amounts). The listed stakeholders getting looted, as unjust as it is, are the only ones you technically can take away from.

Refusing to fold a failed business, about to start over with 2.0 financed by government money ... uh oh, I could imagine the big finance behind the leasing companies pushing for that. Would not happen in Poland (even if 8x as populous to Norway), but then again only full coffers attract the thieves

Last edited by FlightDetent; 16th Jan 2021 at 13:21.
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Old 16th Jan 2021, 11:02
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I was wondering what leverage leasing companies would have on the process.... Then remembered the court is in Ireland - home of Aercap, amongst others!
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Old 16th Jan 2021, 15:13
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The issue leasing companies have is if they reposes the aircraft they will have to pay for storage and maintenance while they find another airline to take the aircraft on, which is unlikely at the moment. If they leave them with Norwegian, even on a pay to fly contract, Norwegian will be paying for storage and maintenance while the aircraft aren't flying.
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Old 16th Jan 2021, 17:06
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It is? Maybe it was once (it didn't seem generous when I was out of work 45 years ago) but not now.
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Old 16th Jan 2021, 23:34
  #1128 (permalink)  
 
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https://www.thetimes.co.uk/article/n...-off-78twvw3zl
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Old 17th Jan 2021, 05:07
  #1129 (permalink)  
 
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So the plan is to put 50, later on 70 planes in the Nordics and fly to continental Europe. So flights in and out of Norway, Sweden, Denmark, Finland etc and considering they are leaving long haul altogether they will most likely use the 737's for it... So in places like Norway Sweden and Denmark maybe there are some opportunities ahead. If the rest of the plan falls into place first finding buyers of the shares, and the courts trimming debt to a min level etc...
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Old 17th Jan 2021, 08:25
  #1130 (permalink)  
 
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The previous shafting of suppliers and shareholders now means that it is not only a campaign to raise funds:
"The Perpetual Bonds are expected to commence trading on Oslo Børs on Monday 18 January 2021" at this time shares are still falling.
But also a hunt for companies willing to do work for them, 171M in unsecured debts already hanging in the wings plus 45 m to the Irish commissioners, the Examiner will have tough job doing a deal with these guys. In political circles terms like "working hard to find a solution" means stuffed for a solution, "working with creditors" means desperately trying to keep them off your back. Let's face it, all the good will has been evaporated. If NAS can get all the maintenance, catering etc carried out in Norway they may have a chance, however, given the history it's unlikely any suppliers will afford credit outside of Norway.
Effectively using the furlough scheme to fund the payroll was a smart move, as was the use of ERTE in Spain but now the light in the tunnel has been turned off there is a real human suffering element to this skulduggery, small suppliers, MROs, etc may collapse. The "support" form the Norwegian government, if any, is more likely to be concessions and incentives as they must be seen to be fair to all airlines. On the surface, 90% of the money came from outside Norway and yet 90% of the job losses are also outside Norway yet 90% of the "dividends" were paid to people inside Norway..
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Old 17th Jan 2021, 13:08
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Sending back 72 aircraft, including 37 787's

ouch!
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Old 17th Jan 2021, 19:49
  #1132 (permalink)  
 
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Interestingly, the Gatwick slot pairs were either returned or traded back in November, one may get the impression they already knew the plan.
https://www.acl-uk.org/completed-slo...line=Norwegian
Are there any jewels left in the crown to sell?

Last edited by Kirks gusset; 19th Jan 2021 at 09:25.
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Old 18th Jan 2021, 19:36
  #1133 (permalink)  
 
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Meanwhile, in Norway, the new airline Flyr are trying to get airborne in the second half of 2021. They have chosen the 737-800 as their aircraft and will in due time operate 30 of them.
Lots of those sitting on the ground in Oslo and Stavanger. Just need a lick of paint and off they go.
If Flyr (means flying) manage to get financing, that is.
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Old 19th Jan 2021, 09:27
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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
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Old 19th Jan 2021, 09:37
  #1135 (permalink)  
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Such bankruptcy risk also applies even if the group should be able to conclude the current restructuring.
Surely that should be the crux of the Examiners review? If there is such a risk I cannot see how the courts can support any continuation of the business. It is basically saying to creditors that they will have to stump up cash (or write off debt) to keep the company going, but there is every likelihood that they will never see that cash again.
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Old 19th Jan 2021, 09:53
  #1136 (permalink)  
 
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The phrases in the OSE filings are pretty much standard CYA clauses that need to be included for any company under bankruptcy protection, and present a possible worst case scenario rather than the most likely outcomes. I am not familiar with pertaining Norwegian law, but Big Tudor is correct, the company needs to demonstrate a viable business plan to be able to continue operations under protection, and stock exchange rules are even stricter when it comes to issuing new shares under such circumstances. Anyone familiar with financial statements phraseology will hardly blink, nothing in there which we did not know already. (In a non-airline business I personally signed financial statements that included some similar wording in the audit opinion on an ongoing basis for nearly 10 years...).
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Old 19th Jan 2021, 17:07
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It seems to me that if the only way an operation is sustainable is through some sort of a 4-way (or more) flag of convenience scheme, it's probably not really sustainable.
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Old 21st Jan 2021, 07:55
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The Norwegian government is now positive to issue a hybrid loan to Norwegian. Terms and conditions apply.
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Old 21st Jan 2021, 08:31
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That's at least some positive news.

The government has set several conditions for participating in the reconstruction, which includes:
The company must be provided with the necessary new capital of at least NOK 4.5 billion, mainly from institutional and strategic investors.
Participation in a hybrid loan will take place on market terms.
It is a prerequisite that the company finally receives approval of an overall restructuring plan within the framework presented by the company.
State participation in Norwegian's restructuring is subject to the Storting's approval.
Ministry of Trade and Industry
Ministry of Transport
THEME
The corona situation
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Old 21st Jan 2021, 21:34
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Positive for some, not so much for a lot of others. They need to wave the magic wand and make some 30-40 billion NOK worth of debt disappear.
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