Reference is made to the revised EBITDA forecast of Icelandair Group (the “Company”) published on August 27th 2018 and the Company’s USD 190 million senior unsecured bonds carrying ISIN NO0010776982 (the "Bonds"). Due to the revised EBITDA forecast, there is a risk of non-compliance with the gross leverage covenants in clauses 12 (b) and 12 (c) of the terms and conditions for the Bonds, which will be measured by reference to the Company's interim accounts for the third quarter to be published by the end of November 2018. Today, the Company initiated discussions with bondholders representing more than 50% of the Bonds.
In view of the revised EBITDA forecast, the Company is reviewing a number of options, including requesting a temporary waiver of covenants from its bondholders, amending the financial covenants of the Bonds or a partial repayment of the Bonds or its other financial indebtedness. In spite of the possible non-compliance with the gross leverage covenants in the terms and conditions for the Bonds, the Company’s cash and cash equivalents amounted to USD 237 million, the Company's equity was USD 530 million at the end of June and the equity ratio was 32%. Furthermore, operating assets amounted to USD 673 million and prepayments on the balance sheet due to new aircraft amounted to USD 143 million. At the same time, the total interest-bearing liabilities amounted to USD 343 million of which secured debt amounted to USD 121 million.
The Company has engaged DNB Markets as its financial adviser.