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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. |
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. |
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. |
Originally Posted by ManaAdaSystem
(Post 10968711)
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.
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 |
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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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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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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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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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.. |
Sending back 72 aircraft, including 37 787's
ouch! |
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? |
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. |
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.” |
Such bankruptcy risk also applies even if the group should be able to conclude the current restructuring. |
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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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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The Norwegian government is now positive to issue a hybrid loan to Norwegian. Terms and conditions apply.
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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 |
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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