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That's old news I'm sorry to say, announced some months ago and probably just picked up by this journalist. They applied for the traffic routings as reported a few posts back before the crunch came, perhaps they anticipate generating enough cash from the 6 internal routes and the Boeing compensation to start these routes again.
https://www.routesonline.com/news/38...as-of-23oct20/ |
AreCap has sold 156 million Norwegian shares and now own less than 10% (9%) of the company.
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Not surprising as Norwegian have just converted another $2m in debt to shares, the dilution is so much now that the forecast is them to be worth zero by next year, so selling while you can at least get something back is the best option and Aercap posted a loss of 850M in the last QTR with depleted cash reserves. Its a domino effect
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But it reaches a precipice when the secured stake/debt holders can extract more value from the liquidation assets than they will ever get from D4E swaps, or than risked returns from letting the company continuing to trade. As equity value is almost zero, I'm surprised that point hasn't already happened.
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Trading suspended on the Oslo Stock Exchange. At the stop of trading, a share in Norwegian cost NOK0.47.
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Would anyone buy a ticket with Norwegian at the moment?
Thats the crux of the problem, without forward bookings the relaunching of Longhaul out of LGW looks doubtful, indeed any flying out with Norway itself appears problematic. i hope I’m wrong but it’s not looking great. |
LGW long haul start up in March was the original plan.
It then came forward to December, now back to March. I would not book, but that is just me. Just cannot see how they can restart the equivalent of an entire airline again (30 odd 787s), with nobody current on type, and the aircraft stored. It will be such a huge cost to bring back the fleet. |
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https://media.uk.norwegian.com/press...ot-dot-3052095
“Our intent is clear. We will emerge from this process as a more financially secure and competitive airline, with a new financial structure, a rightsized fleet and improved customer offering,” said Schram. |
Norwegian is seeking examinership / reorganisation in Ireland, where the company that owns their plane assets is registered.
Examinership protection requested to include NAS (Norwegian Air Shuttle (the Norway registered mothership) as a related part. According to stock exchange release: https://newsweb.oslobors.no/message/518391 |
For those in the dark:
Examinership is Irelands corporate rescue process which gives an insolvent Company (or group of Companies) protection from its creditors for a period of up to 100 days. The protection afforded under examinership legislation is to facilitate a Company (through a Court appointed Examiner) secure investment and put a legally binding scheme of arrangement in place for the settlement of debts with its creditors. Once a Company has been placed in examinership by the Court, this prevents any enforcement through either the appointment of a liquidator or a non- statutory receiver. A Company can utilise the examinership legislation to overturn the appointment of a Receiver but there is a very narrow window of time to do so. When a Company successfully exits the examinership process, the Company continues trading with the business and assets intact, jobs saved but without the majority (or in some cases any) of the liabilities accumulated prior to entering the examinership. The opportunity which examinership affords for Companies to restructure is invaluable. Getting early advice prior to and guidance throughout the process is critical to a successful outcome. Examinership Process Obtaining a practical understanding and clear direction on each of the three distinct stages of the process; entry, during and exit is paramount to a successful outcome; Entry • Company must be insolvent • Company must be suitable for the process meaning that it should have a reasonably prospect of survival, sufficient cash flow for the 100 day protection period and ideally have the support of stakeholders To allow a Company successfully exit examinership, the investment pledged must be received by the Company. Sufficient investment monies will be required to facilitate the payment of the dividends outlined in the scheme of arrangement, any immediate working capital required and the examinership costs. |
It is a brilliant way to do business. Grow like there is no tomorrow with an unprofitable business model, lose a fortune, accumulate as much debt as you can, restructure your debt once by asking your creditors to become shareholder, lose 99% of your company value in a year then what, 6 months after ask to restructure the debt again. You could not make this stuff up.
And most of this happened in a time where most of your competitors were making billions of profits. |
Lars-Daniel Westby, an analyst at SpareBank 1 Markets in Norway, who last week told the Financial Times Norwegian was likely to file for bankruptcy in Ireland or the US, has said it could split into a profitable short-haul European operation and a lossmaking long-haul business. |
I am no businessman but why would you bother with a loss making long haul business? Why not just sit on the profitable shorthaul operation?
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They won't! the loss making LH will be culled and the SH will be offered to investors. Of course, the LH leasing companies that are also shareholders may be offered pro rata shares in any revamped SH venture just to stop them voting against the proposals put to creditors and the plug being pulled. This process will only work if the majority of creditors accept the plans and the court are sure that the company can survive.. any doubt is no doubt as they say in the sim!
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First deadline December 6.
By this date they (Ireland) must decide if keeping the company alive is a better option than selling off whatever values it has. The way this company is set up does not make this easy. Only the Irish parts are in «Chapter 11», the Norwegian part of Norwegian is protected as an «associated» company. If they manage to pull this off, they have 150 days to get the company on it’s feet. That takes money. The Irish/Chinese owners don’t want to inject any money, something the NO government is well aware of. On top of that, the government is not very happy with the way Norwegian is set up with various sub companies in other countries. |
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It's incredible how some "know" who wants to put money , who doesn't , if the Irish if the Chinese if Santa, what's going to happen and by what order. Basically know more than the investors themselfs 🤣
This thread is going for years...already bankrupted and closed shop at least 5 times and somehow it's still up and running... |
737Driv3r;
Santa is not a shareholder, but China (via 6 or 7 sub-companies) and AerCap (Ireland) + several other Irish companies are. Between them they own a big chunk of Norwegian. Please tell us how much money they have injected into the company? The answer is 0. They don’t even want to own the company, but was forced to by the debt for shares stunt Norwegian pulled. |
The special thing now is that many of the largest owners are both creditors and shareholders. They are guaranteed to vote yes to restructuring if they get paid well enough for their debt in the form of shares in new Norwegian, and sell the old almost worthless diluted shares.
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Uncle, you said it yourself - the shares are almost worthless, so why would they convert secured debt into more worthless shares. The level of security on debt varies, but the (Norwegian) governments tend to put themselves at the front of the queue for break up assets - it wouldn't be much, but at a guess, I'd say it's more than the equity would be worth. Anyway, first the administration has to be approved by the judge, and that's far from certain.
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In reality the "old structure" dies and the value of the shares dies with it, so selling any old shares is not possible, who's going to buy shares in a structure that no longer exists? The shares are already under observation for OSLO trading and forecast is worth zero, so forget raising money by selling old shares.
The existing "creditors" may also be share holders, however their historical debt was converted to shares in May and it could be seen the slate was wiped clean with that transaction, the "new debt" has accrued since May and is on-going with contractual obligations, wages, overheads etc, and it is this "new debt" that balanced with the available income and cash reserves puts the existing company in insolvency. The examinership process is solely designed to protect the company from its creditors for the period 100 days, during which a feasible and sustainable business plan must be made, or the company is declared bankrupt. Of course the shareholders will vote for restructuring, they have little choice, but the hat they wear as "creditors", means that for the process to be approved by the court with a successful exit they will get more in real terms than if the company is dissolved and the assets sold. One must remember that the primary role of the Examinership is to protect employees. Examinership, it’s Ireland’s rescue framework for, you know, otherwise viable companies that find themselves in difficulty, but they have good, good prospects for survival if they can be restructured. In fact, the test actually is only a reasonable prospect of survival and subject to certain conditions that if they can restructure themselves, they can still be there for the for the benefit, particularly of the employees, which is why the legislation was introduced in 1990. And secondly, then for the benefit of the community as a whole, that, you know, that the enlightened approach is that businesses should have a second chance, should be given a second chance if they are if they can be viable, if they’re restructured. So that’s what that’s what Examinership is. Cityjet creditors agreed to write off 75% of their debts and the company received sufficient external investment cash to continue. A slimmed down Norwegian with the new management may well be an attractive investment, lets see who comes out of the woodwork on this. Pity Braathen has hovered up some potential sources |
From The Irish Times:
https://www.irishtimes.com/business/...icit-1.4415098 The outlook is not encouraging. |
“the report says the companies have a reasonable prospect of survival if they take certain steps proposed by management, including renegotiating lease payments on their aircraft, deferring some loan repayments, cutting their fleet and cancelling future aircraft orders.”
Seems there is hope |
liquidating Norwegian would see the creditors loose everything :
”An independent accountant’s report submitted to the court shows that winding up Norwegian AirShuttle would wipe out most of its assets, leaving a $7.1 billion (€5.98 billion) shortfall, eliminating any chance of creditors collecting on the debts due to them” |
They were losing money before the pandemic. Their major competitors are now leaner and ready to make serious money.
Seriously, if a family wanted to spend money next year on a trip to the USA do we think it’s wise to spend money on them or one or their competitors? It’s a no brainier. And I feel for the staff who have been badly treated but many people have been laid off in other companies too. They bring nothing to the pilot profession apart from a step downwards and because of that, in my opinion, they do not deserve to succeed. |
The lease payments were changed to PBH in the May bail out, not sure what's left to be negotiated, other than fly for fee.
Deferring loan payments, guess that's up to the Banks and the government of Norway, but the loan payments have already been deferred once from Dec to March. Cancelling future orders, already done, but at legal stages with Boeing regarding payback of prepayments and compensation, that case likely to last a year. The good thing is that the Court have identified the liquidation would just leave huge debt, nothing for creditors so anything better than that is a bonus and helps the process. Key to this is external investment, no investment, no happy ending |
"They bring nothing to the pilot profession apart from a step downwards and because of that, in my opinion, they do not deserve to succeed."
I'm not sure I follow your sentiment... I used to fly for Norwegian and I only left to go home (I was made redundant 2 months after I left in my new airline). I saw nothing but professional and dedicated people at Norwegian, and the pay was absolutely acceptable. Not perfect, but at the upper scale for low cost at the very least. Only long days and too many nightstops out of LGW was really a "minus" as I recall. If Norwegian folds I suspect we will see an even faster decline in T&C's across the board. The next major low-cost company might not be as union friendly as Norwegian. Not sure how this will play out, but I hope we will see a better, leaner Norweigan at the other end of Covid-19. |
I made no reference to the pilots. I know a considerable amount of them and agree with you.
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Originally Posted by SSDK
(Post 10931652)
If Norwegian folds I suspect we will see an even faster decline in T&C's across the board. The next major low-cost company might not be as union friendly as Norwegian
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Any idea what this may mean for the LGW SH skippers that were made redundant and looking at CRZ CPT on 787? Is this a ploy to suggest they are protecting jobs?
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It was assumed that all the creditors would agree to the process, but getting a High Court Judgment against the company in which you have an interest is a pretty strong statement that the Courts will not ignore
"The judge awarded Norwegian temporary protection until December 7, by which time creditors of Norwegian’s Irish subsidiaries can lodge their opposition." The problem now is that having the default judgements made by the UK Court, unless the examinership protection continues the winding up is almost certain unless the previous debts are paid off in full.. |
Boeing seeks dismissal of Norwegian Air’s €1bn lawsuit over Max aircraft
https://www.irishtimes.com/business/...raft-1.4417147
”Boeing is bidding to stall troubled airline Norwegian Air’s $1 billion lawsuit against the US aircraft manufacturer while the Scandinavian carrier lines up a rescue attempt in the Irish courts” |
BOC Aviation Limited (China) dumps 39 million Norwegian shares and now owns just under 5% of the company.
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BOC have been gradually selling shares but still hold over 182 Million shares in NAS and the group companies, although the values have plummeted since the bail out in May.
Selling these 39 Million shares would have generated $18M in May, now just $2M. On a positive side, it does free up more shares for investment, although it looks like a fire sale by the leasing companies is taking place before the next stage of the examinership, which if rejected renders the shares worthless. |
Even with the debt for shares program earlier this year, NAS still has a debt of around 4 billion Euros. No new investor will bei terested in throwing more money into this bottomless pitt.
The only sensible thing to do is liquidate this mismanaged company, eventhough it will hurt the creditors. Norwegian will never be a serious contender in the aviation market again. Post Corona they will not have the muscle to compete with Ryanair, Wizz air and Easy Jet. Unless ” somebody” is stupid enough to inject at least 1 billion EUR into this doomed company. |
AerCap dumped another 48 million shares today.
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Yeah, saw that somewhere. Wonder who is buying this next to worthless share.
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For the financial gurus:
It is quite clear that only 20% of the income came from the home market, therefore, by definition, if the new structure allows just for Norway based operations, 80% of the revenue would be lost.. having said that, the biggest growth in revenue 29% came from "other" which translates to selling aircraft, fuel hedging, selling fixed assets, exchange transactions etc.. if you like "wooden dollars" as these transactions are really "one off". Interestingly, USA and Spain were the second biggest source of pax revenues, again, with the demise of LH ops, thats another 19% lost. A sensible model would appear to be a much reduced fleet, just SH and Norway and Spain operations. In terms of who's buying shares, there are no apparent large single investors, and with the price so low perhaps many are taking a punt with over 66% of the shares up for grabs. Sales per Business 2018 2019 Delta NOK (in Million) % NOK (in Million) % Passenger Transport 32,560 82.3% 35,216 82.6% +8.16% Ancillary 6,267 15.8% 6,652 15.6% +6.14% Other 695.60 1.8% 899.00 2.1% +29.24% Freight 743.30 1.9% 755.10 1.8% +1.59% Sales per region 2019 NOK (in Million) % Norway 8,644 20.3% United States 8,313 19.5% Spain 6,005 14.1% Other 4,585 10.8% United Kingdom 4,458 10.5% Sweden 3,430 8% Denmark 2,977 7% France 1,949 4.6% Italy 1,214 2.8% Finland 1,206 2.8 |
In terms of who's buying shares, there are no apparent large single investors, and with the price so low perhaps many are taking a punt with over 66% of the shares up for grabs. |
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