Hard times for Norwegian
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Good luck to all Norwegian crew tomorrow. There are hardly any professional investors left among the shareholders.
It’s happy amateurs day and the result is wide open.
It’s happy amateurs day and the result is wide open.
Last edited by ManaAdaSystem; 3rd May 2020 at 10:19.
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Norwegian believe they have enough bondholders onboard for agreement.
According to stock exchange messages in english from the company here:
https://newsweb.oslobors.no/search?issuer=7628
According to stock exchange messages in english from the company here:
https://newsweb.oslobors.no/search?issuer=7628
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SVT report an agreement has been made. Published 14:38 in this live thread: https://www.svt.se/nyheter/inrikes/s...-coronaviruset.
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Thats a step in the right direction, however, reading the attached "summons" it would appear a lot hangs on the valuation of the Gatwick slots. What they have is an agreement in principle to take to the EGM and bond holders meetings, what they still need is the major hurdle of the lessors agreeing to write off 500M in debts and effectively become de facto airline operators. If they secure this first round of funding it really only preserves the core operations in Norway and does nothing to address the issues of the other 160 aircraft grounded as they don't expect revenue streams to be able to support the model until late 2021. The pilots outside Norway will still be unemployed for at least a year and the proposed "flexible contracts" smack of seasonal jobs, one could reasonably expect a low basic salary plus performance and/or sector pay, having said that, the way the whole industry is looking it may be a relief to know you may possibly get your LPC done and be "on the books" even if not being paid. As most of the crews outside Norway are on some agency deal ( or were) then it falls on the agency to take the gamble on the pilots unless NAS is planning on direct hires under greatly reduced basic terms.
https://www.theguardian.com/business...ine-to-survive
https://www.theguardian.com/business...ine-to-survive
Last edited by Kirks gusset; 3rd May 2020 at 14:30.
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As I predicted several months ago
Norwegian Air Shuttle ASA (the “Company”) is pleased to announce that it has received strong support from lessors for a minimum conversion to equity of USD 730 million (excluding conversion under the so-called power-by-the-hour arrangement), up from the previously announced USD 550 million. The conversion is supported by a significant number of lessors and the Company continues to discuss with other of its lessors for possible further conversion of debt to equity. The Company yesterday announced that major contributions from all bondholders have been agreed. With the significant contributions from lessors and bondholders, the Company expects to convert more than NOK 10 billion in debt to equity. With this, the Company expects to significantly outperform the 8% equity ratio requirement in the Government State Aid Package. In addition, the Company expects that the shareholders will approve a public offering of up to NOK 400 million in new equity (the “Public Offering”). The Company is also pleased to announce that it has received commitments from bondholders to subscribe a meaningful amount in the suggested Public Offering. With the conversion of more than NOK 10 billion from debt to equity now, a successfully completion of the Public Offering and significant concessions on future lease costs in the range of USD 200 million that will additionally be converted into equity, the Company has laid a solid foundation for New Norwegian and a strong return to the skies once the COVID-19 situation improves
Norwegian Air Shuttle ASA (the “Company”) is pleased to announce that it has received strong support from lessors for a minimum conversion to equity of USD 730 million (excluding conversion under the so-called power-by-the-hour arrangement), up from the previously announced USD 550 million. The conversion is supported by a significant number of lessors and the Company continues to discuss with other of its lessors for possible further conversion of debt to equity. The Company yesterday announced that major contributions from all bondholders have been agreed. With the significant contributions from lessors and bondholders, the Company expects to convert more than NOK 10 billion in debt to equity. With this, the Company expects to significantly outperform the 8% equity ratio requirement in the Government State Aid Package. In addition, the Company expects that the shareholders will approve a public offering of up to NOK 400 million in new equity (the “Public Offering”). The Company is also pleased to announce that it has received commitments from bondholders to subscribe a meaningful amount in the suggested Public Offering. With the conversion of more than NOK 10 billion from debt to equity now, a successfully completion of the Public Offering and significant concessions on future lease costs in the range of USD 200 million that will additionally be converted into equity, the Company has laid a solid foundation for New Norwegian and a strong return to the skies once the COVID-19 situation improves
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Bondholders on board.
Leasing companies on board.
Shareholders will not vote against. Kjos told them Norwegian only have cash for 5 more days. The shareholders plan to push the Norwegian government to pay the airline 10 billion failed.
Value of current shares reduced to 5%.
After today, Norwegian will be Norwegian only in name.
Leasing companies on board.
Shareholders will not vote against. Kjos told them Norwegian only have cash for 5 more days. The shareholders plan to push the Norwegian government to pay the airline 10 billion failed.
Value of current shares reduced to 5%.
After today, Norwegian will be Norwegian only in name.
Last edited by ManaAdaSystem; 4th May 2020 at 07:57.
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From the Financial Times… "Norwegian closes in on debt-for-equity pact to unlock state rescue"
Norwegian closes in on debt-for-equity pact to unlock state rescue | Financial Times
Norwegian closes in on debt-for-equity pact to unlock state rescue | Financial Times
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Shareholders on board.
The deal seems to involve only flying 7 planes until April next year, only paying leases on them from July and paying additional leases only on any extra planes they will actually be using.
That will make it difficult to rotate the planes in use and keep most flying to keep them all in good condition.
Management seem to be very cautious in their plan for back to business. Leaseholders and bondholders with their loans secured in planes, that now in effect will own the company, should press for flying anything that will take in more than the variable costs. That should include cargo and getting more people in the air by finding a way to make the flying experience seem less of a case for easy virus contaminastion than it normally does. That means less press pictures of stuffed planes and more of cleaning, dividers and physical separation. Can't do that if your target is using as few planes as possible.
The deal seems to involve only flying 7 planes until April next year, only paying leases on them from July and paying additional leases only on any extra planes they will actually be using.
That will make it difficult to rotate the planes in use and keep most flying to keep them all in good condition.
Management seem to be very cautious in their plan for back to business. Leaseholders and bondholders with their loans secured in planes, that now in effect will own the company, should press for flying anything that will take in more than the variable costs. That should include cargo and getting more people in the air by finding a way to make the flying experience seem less of a case for easy virus contaminastion than it normally does. That means less press pictures of stuffed planes and more of cleaning, dividers and physical separation. Can't do that if your target is using as few planes as possible.
So the pilots are basically furloughed on zero cash until nextApril? Any idea how things like recency/LPCs are handled given OSM have had their agreements terminated?
As I see it the company just about survived but they’ve thrown most of the employees over to do it?
As I see it the company just about survived but they’ve thrown most of the employees over to do it?
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The 7 planes are what the Norwegian government subsidises for providing a minimum route network within Norway.
Management haven't made public what their plans for international or longhaul are yet. It depends on the governments of different countries coming together and reopens borders.
This could take some time if they are all going to follow a Trump'ish attitude of we are doing better than all the others and don't want their contamination to affect our much better numbers and handling of the situation. A stance experts in most countries have said has little effect as long as internal community spreading is widespread. So lack of possiblility for international passenger flying is a political matter rather than an expert led problem.
Management haven't made public what their plans for international or longhaul are yet. It depends on the governments of different countries coming together and reopens borders.
This could take some time if they are all going to follow a Trump'ish attitude of we are doing better than all the others and don't want their contamination to affect our much better numbers and handling of the situation. A stance experts in most countries have said has little effect as long as internal community spreading is widespread. So lack of possiblility for international passenger flying is a political matter rather than an expert led problem.
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I thought management did make their plans public, with their investor presentation, showing how they planned to recover from this crisis, and move forward.
It showed long haul not starting before April 2021 for example.
Now the future is secure, let's hope they can make it clear to the crew when they plan on them returning.
For example LGW crew are still employed by OSM receiving JRS payments from the UK government, yet have no idea when Norwegian will re establish the contract with OSM.
Does that mean they are employed until the UK JRS runs out at the end of June.. then what?
I am happy to see Norwegian are going to survive, I just hope now the employees which have stood by the airline have some direction, so they themselves can plan for their future.
It showed long haul not starting before April 2021 for example.
Now the future is secure, let's hope they can make it clear to the crew when they plan on them returning.
For example LGW crew are still employed by OSM receiving JRS payments from the UK government, yet have no idea when Norwegian will re establish the contract with OSM.
Does that mean they are employed until the UK JRS runs out at the end of June.. then what?
I am happy to see Norwegian are going to survive, I just hope now the employees which have stood by the airline have some direction, so they themselves can plan for their future.
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In summary, LGW LH fleet Spain 737 fleet have been thrown under the bus., the LGW ground support has ceased. The questions of "recency" are by way of concessions from the UK CAA, although the caveat is that the "Airline must demonstrate it is safe".. so with NO JOB, you have no airline, OSM do not hold a AOC and thus the pilots are at the good will of NAS to keep them current. We all know that if you have not "operated the aircraft " within the previous 6 months, 12 at a big push, your chances of employment are slim. The idea of keeping your CV in a talent pool suits NAS as they can pick and choose when they want on a PBH way for pilots! The presentation to shareholders, The "Plan" makes it quite clear that NAS do not expect ANY improvement until April 2021 and will use the cash buffer to consolidate the core out of Norway, i.e keep the brand alive.
yes, its dead! until 2021, thats why the needed the 500M conversion and PBH
Management haven't made public what their plans for international or longhaul are yet