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Hard times for Norwegian

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Hard times for Norwegian

Old 19th Jan 2021, 18:07
  #1141 (permalink)  
 
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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, 08:55
  #1142 (permalink)  
 
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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, 09:31
  #1143 (permalink)  
 
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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, 22:34
  #1144 (permalink)  
 
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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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Old 22nd Jan 2021, 08:21
  #1145 (permalink)  
 
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Norwegian financial media reporting this morning that Nordea bank and DNB bank willing to invest and become owners of Norwegian. DNB bank is Norway's largest financial services group with total combined assets of more than NOK 1.9 trillion and a market capitalisation NOK 164 billion as of 20 May 2016. More notably the largest owner of DNB is the Norwegian Ministry of Trade and Industry.
A real shame LH had to close down, but without government support, flawed RR engines, covid and a total let down from Boeing, it wasnt meant to be this time around.
The 70 aircraft in 2022 will hopefully be enough to fend of Ryanair from the Nordics.

Last edited by uncle-traveling-matt; 22nd Jan 2021 at 08:41.
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Old 22nd Jan 2021, 14:04
  #1146 (permalink)  
 
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The court has given them an extension to allow the plans to be finalised, apparently, 2 Billion in debt wiped away mainly by the lease companies taking one for the team, but still over 220 Million in debt to be "resolved" plus 543 Million needed to satisfy the Norwegian Government and allow access to the funds, so about 770 Million gap needs plugging. Highly likely the creditors that already have judgements for 171 Million will stick out to get the money as they know its the last real chance, so the question remains if the banks will stump up to settle old debts, which is dead cash or insist this is done before they "invest". Even selling and leasing back the owned A/C would not raise the money required, only hope is existing shareholders "supporting" the plan by discharging the old debts, but that is a bitter pill if "new investors" get all the cream, or an "offer" of X cents on the dollar to creditors in the hope they take it..in marketing "spin" terms " a better deal for the creditors"

https://www.irishtimes.com/business/...sion-1.4465268
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Old 23rd Jan 2021, 17:38
  #1147 (permalink)  
 
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A hearing to consider the repudiation of some of Norwegian's liabilities will be heard by the High Court on January 28.

https://www.irishtimes.com/business/...plan-1.4465268

Interesting approach to debt management, claim the leases are invalid, but that appears to be a small fly in the ointment as they don't have enough cash to refund the passengers for cancelled flights and the terms of the new investment require there are no skeletons likely to jump from closets

https://www.travelweekly.co.uk/artic...ghly-uncertain

Last edited by Kirks gusset; 25th Jan 2021 at 11:19.
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Old 27th Jan 2021, 15:47
  #1148 (permalink)  
 
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More here today:

https://www.norwegian.no/globalasset...-creditors.pdf

The headline "Ramp up" basically translates as: not going to pay for anything unless needed, crews need to be paid on furlough by their own countries.

Interestingly they want to raise the capital to EXIT the examinership AFTER they exit..seems "promises" will come in Feb, not quite sure the courts here will warm to that, funds should be in place before EXIT according to the law

In a nutshell, the presentation to shareholders is nothing new and the promised "investment" seems as far away as ever. Norway is a very rich country, the banks are loaded, this 4.5 Billion is small beer to them.. why no appetite for the project? the management are being transparent for once and not making any promises.
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Old 27th Jan 2021, 16:59
  #1149 (permalink)  
 
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The government still holds strong ownership in the largest norwegian banks (DNB for one) after the last financial crash. These banks are willing to stump up money but in reality its state aid by another name. Governments have usually no problem doling out easy gotten taxpayers money because its relatively easy to collect some more. Problem is finding somebody else that is willing to stump up a substantial amount of their own hard earned cash for another flying folly. To show that there are also norwegian private investors with enough wherewithals to amass their own fortune, that believes money can be made by investing in the airline Norwegian.
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Old 2nd Feb 2021, 18:37
  #1150 (permalink)  
 
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Yes yes, a really nice company... Time to close the doors
https://www.balpa.org/Media-Centre/P...apse-of-Norweg
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Old 2nd Feb 2021, 19:33
  #1151 (permalink)  
 
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Unfortunately KPMG are also dealing with the Irish Examinership
NAS and four Irish subsidiaries have Irish High Court protection from creditors while examiner Kieran Wallaceof KPMG puts together a rescue plan for the Scandinavian carrier.
The UK guys got £96K for writing a few letters and the Irish ones will be getting £Ms. The Irish Courts had the the wool pulled over their eyes and now have the embarrassing scenario of the Irish Companies they were meant to protect also being hit on the 4th if the leases are repudiated by the court, although there is no justification for this action according the lessors.
The simple answer is for the creditors not to agree the court proposals, it may be a home goal for some but will protect others in the future.
As for the £10.5million that was due to the NAR UK and spirited away to "NAS Invest" ,NAS Invest was owned by a "Norwegian" but dissolved in 2016 probably just a coincidence, but in 2018 another NAS Eire Invest sprung up. No doubt KPMG will get all the info...unless someone "forgot" they were owed 10.5 M

Last edited by Kirks gusset; 2nd Feb 2021 at 20:28.
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Old 2nd Feb 2021, 22:51
  #1152 (permalink)  
 
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The frequent flyer program has been put on hold.

https://www.forbes.com/sites/davidni...ogram-on-hold/
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Old 3rd Feb 2021, 07:52
  #1153 (permalink)  
 
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Yes, after they convinced a bunch of gullible customers to take points (hey, we“ll even give you a 20% bonus!) instead of cash when "refunding" tickets for corona cancelled flights.
Shell game, bait and switch, just call it what it is: grift.
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Old 4th Feb 2021, 15:15
  #1154 (permalink)  
 
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Looks like a storm is brewing in the process on at least two accounts :

https://www.irishtimes.com/business/...sors-1.4476352

The leasing companies claim they were "bombarded" with multiple applications on 3rd Feb to return the aircraft with no reference to the terms and conditions, maintenance schedules or re-delivery costs. Norwegian stated they will continue to "store and maintain" the aircraft until return, but the lessors think the 163M cash the company will have left will be insufficient to cover the costs of the "return" obligations under the leases. The court may repudiate the leases but that does not cancel the existing obligations under the lease, simply cancels any obligations going forward

Repudiation involves the company ending lease agreements or contracts, but paying the creditors involved one settlement based on the amount owed on the date the company went into examinership, and a second settlement covering liabilities from the period of the examinership itself.The lessors then gets the same dividend as all others on the difference between the total the company paid in the settlements and the full amount due.

Mr Justice Michael Quinn proposed allowing until Friday, February 12th for creditors to reply to the companies’ applications. The issue is due back before the court on Monday, February 15th.

Also on Thursday, NAS and its subsidiaries asked the court to repudiate contracts with various suppliers, including Irish company, In Flight Audio, fuel and catering businesses and US airports such as Boston Logan.

Secondly BALPA want KPMG to clarify why NAR have gone back on the promises to crews, opening the can of worms regarding the 10.5 which should technically be collected by the liquidator as part of the winding up of the UK operation..Keeping your old uniform as "keep sake" for heavens sake!

Last edited by Kirks gusset; 5th Feb 2021 at 16:37. Reason: Up to date
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Old 15th Feb 2021, 13:08
  #1155 (permalink)  
 
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Latest news is Examiner has requested a further 50 day extension to the process, apparently lessors and creditors cannot agree the proposals and the investment has not been forthcoming as yet.

https://www.irishtimes.com/business/...nded-1.4485227

Interestingly an Air Moldova Airbus has been prevented from leaving Dublin after ex-parte order granted by Judge for unpaid bills.

https://www.irishtimes.com/business/...ward-1.4481524

Last edited by Kirks gusset; 15th Feb 2021 at 22:34.
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Old 15th Feb 2021, 19:46
  #1156 (permalink)  
 
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Not quite. The creditors have requested an extension. The judge will decide if it is granted
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Old 15th Feb 2021, 22:29
  #1157 (permalink)  
 
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Not quite!

Norwegian needs more time for restructuring. The deadline for Norwegian Air and its four Irish subsidiaries’ protection from creditors by the Irish courts is currently set to February 25th. However, the Irish Times reports that examiner Keiran Wallace of Anglo-Dutch KPMG is set to ask the High Court to provide an extension.

The senior counsel to the examiner informed the court of the likelihood of the forthcoming request on Monday. Initially intended to last 100 days, this would increase the length of the examinership to 150.
The creditors are saying that Norwegian is trying to now trying to force a take it or leave it deal, and the council for the Examiner will request a further extension. The judge will decide if the extension can be granted, but almost certainly will. The creditors must respond by this Friday to the proposals of Norwegian, the leases are a sticking point and now Norwegian has decided to get back in bed with Boeing for the continued maintenance.


Last edited by Kirks gusset; 16th Feb 2021 at 10:24.
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Old 16th Feb 2021, 10:28
  #1158 (permalink)  
 
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A key issue for NAS itself is terminating leases on aircraft held by the Irish companies and returning them. Its lawyers recently signalled that it wanted to do this with 36 jets, but on Monday, the High Court heard that the airline had reached settlements with lessors, including Avolon, SMBC Aviation Capital, Orix, Aviation Capital Group and others, relating to 21 aircraft.

The court will hear applications to repudiate leases covering the remaining planes, along with service contracts with various other suppliers on February 23rd. It is possible that more creditors will have agreed deals by then, but a few leases are likely to remain, so that hearing itself could take days.

Asking the court to repudiate the leases will be complex, as they involve the agreements themselves, guarantees and other contracts. They also involve several parties, namely the airline subsidiaries, lessors, banks and other entities. This is a long-haul journey, the like of which the Norwegian airline has never before experienced.
The raising of 500 Million is still to be confirmed in order to trigger the release of the Norway state funds, potential investors do not want to simply settle old debts and existing creditors want some hard cash as opposed to hybrid instruments that proved worthless in the past. Chicken and egg.
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Old 18th Feb 2021, 10:42
  #1159 (permalink)  
 
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Yes, even in best of times investing in airlines is not for everyone. Now there is more competition also with the new startup, more Wizz and as always Scandi changing the market a bit when things will pick up again. Add a covid situation where no-one really knows when things will pick up again, at what pace and to what levels. So it's not a easy case for sure. But same time if things turn out well or better then the base-case the instruments should reward those who went for it. Perpetual bond at around 10% later on, unless i misread, sounds nice for example if the rednoses keep going and stays in the air...
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Old 19th Feb 2021, 19:40
  #1160 (permalink)  
 
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Yet another extension, seems reasonable given the logistics of arranging creditor meetings. Planned exit will be around May, IF the funds are forthcoming.

https://www.irishtimes.com/business/...tion-1.4489905

Another complicating factor, the court heard is the companies’ ongoing efforts for repudiation of aircraft leases and service contracts it had entered into. The company says, if it is to survive, it needs to have those agreements set aside.
Several contested applications regarding leases, arising mainly out of Norwegian’s decision to reduce its fleet when it opted to cease its long-haul services, are due before the High Court next week.
The lessors sticking out for a proper settlement ironically may be the one that get the "best deal" as they are now the fly in the ointment

Mr Justice Quinn, who made orders in other motions from the examiner over the approval of pre-petition payments for critical services, fixed April 16th to the examiner’s application to formally approve any scheme of arrangement approved by creditors.
And, to continue to operate the examiner must now start paying for "critical services"
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