Reference is made to the stock exchange announcements from Norwegian Air Shuttle ASA (the “Company”) dated 14 April 2020, relating to bondholder meetings to be held on 30 April 2020 in respect of NAS07, NAS08, NAS09 and the USD 150 million convertible bond issue with ISIN NO 0010868284 (the “CB"), and the extraordinary general meeting to be held on 4 May 2020 (the “EGM”).
Based on negotiations and discussions with lessors and bondholders, the Company has concluded to put forward a proposal to its bondholders in principal for conversion of 60 percent debt to equity in respect of NAS07 and NAS08 and 85 percent debt to equity in respect of the CB, on terms attached in the notice to the bondholders (in accordance with the summons). The Company has agreed to a minimum threshold of lessor concessions of USD 500 million with an aim to get the total debt to equity conversion from lessors and bondholders up to USD 1.2 billion with current shareholders retaining 5.2 percent of the share capital in the Company post debt to asset conversion but before the proposed equity issue.
As part of the restructuring, and as a condition for the Norwegian state aid package of NOK 2.7 billion (the “State Aid Package”), the Company needs a minimum of NOK 300 million of risk participation, which the company plans to implement by way of an issue of new cash equity. The Company intends to raise up to NOK 400 million through a public equity offering where the existing shareholders of the Company and other stakeholders, including new investors may participate, subject to applicable securities laws (the “Public Offering”). The Company will seek to provide preferred allocation to existing shareholders and certain other stakeholders. The preferred allocation to shareholders will be, based on their shareholding in the Company as of 30 April 2020 as registered in VPS on 5 May 2020, but no assurance can be given that such preferred allocation is achieved or made to the fullest extent. The equity issue could not be structured as a rights issue due to the timing constraints related to the liquidity situation of the Company.
The proposed subscription price of the Public Offering is expected to be announced as soon as it has been resolved by the Board of Directors, at the latest immediately prior to the EGM. The full terms and conditions of the Public Offering will be included in a prospectus to be approved by the Norwegian Financial Supervisory Authority (the “Prospectus”).
According to the current timetable, and subject to the approval by the EGM of the Public Offering and the approval of the Prospectus, the application period for the Public Offering is expected to commence on or about 5 May 2020 and end on or about 11 May 2020, subject to any shortening or extension.
Based on the assumption that the above proposals to convert debt to equity and the Public Offering are resolved and completed in accordance with the terms described herein, the Company is estimated to have a pro forma equity ratio significantly above the 8% requirement in the State Aid Package.
In connection with the upcoming bondholder meeting, the Company has prepared the attached company presentation which is also available at the Company’s web site.
The summons to the respective bondholders’ meetings, agenda and notice are attached and available on www.norwegian.com and www.stamdata.com.