DUBLIN (Reuters) – Ireland’s High Court cleared the way on Friday for Norwegian Air to raise new capital and emerge from bankruptcy protection in Ireland and Norway in May by approving the airline’s restructuring scheme.
Norwegian’s survival plan, announced last year, puts a definitive end to its long-haul business, leaving a slimmed-down airline focusing on Nordic and European routes.
“We can now go forward with the reconstruction in Norway and initiate a capital raise.” Chief Executive Jacob Schram said in a statement following the ruling.
The Irish court made the ruling, a key milestone in the airline’s battle to survive the coronavirus pandemic which has decimated air travel, after none of its creditors challenged the proposed restructuring during a two-day hearing.
A key condition of the scheme is that Norwegian raises at least 4.5 billion crowns ($524 million) from new shares and hybrid capital, of which Norway’s government has said it is willing to contribute 1.5 billion crowns
Justice Michael Quinn told the court that there was “sufficient confidence” that the investment could be secured.
The court-appointed official who drew up the restructuring scheme indicated on Thursday that he believed Norwegian was at an advanced stage in talks with investors and was likely to secure the required funding.
“This is a demanding and ongoing process, however, the result of the court rulings today enforces our beliefs of a positive final outcome. We are looking forward to and are preparing for a post-pandemic world, without travel restrictions and open borders,” Norwegian’s Schram said.
Financed largely by debt, Norwegian grew rapidly to become a major carrier by the time of the COVID-19 outbreak, serving routes across Europe and flying to North and South America, Southeast Asia and the Middle East.
It now plans to cut its fleet to 53 jets, from 140 before the pandemic, and slash its debt to 20 billion Norwegian crowns ($2.3 billion) from 56 billion.
Norwegian’s next step is to secure a similar approval from a Norwegian court and then seek permission from the Norwegian financial regulator to proceed with a new share issue.
Norwegian said a voting process in Norway on its restructuring proposal would be concluded around April 9. It would exit the restructuring process on May 26, once it had secured the new funding.
(Writing by Gwladys Fouche; Editing by Victoria Klesty and Alexander Smith)