Norwegian Air Shuttle, the debt-ridden low-cost airline, is returning to capital markets in a bid to raise potentially more than $300 million.
Norwegian is contemplating a private placement of as many as 27.25 million new shares, representing about 20% of its share capital.
The company also wants to sell convertible bonds for as much as $175 million, it said. At November 5’s closing price, the new shares would be worth 1.255 billion kroner ($136 million).
It’s the second time Norwegian is selling new shares this year, after it got 3 billion kroner in a rights issue in March.
The plan follows a series of measures intended to improve liquidity in recent months, including delaying aircraft orders, a sweeping cost-reduction programme and bond amendments, as well as selling planes and eliminating investment commitments through the establishment of a joint venture.
The new transactions are needed to fund working capital during the airline’s winter season and create headroom to financial covenants, Norwegian said.
Engine issues with its 787 Dreamliners and the grounding of the 737 Max have resulted in extra costs of 1.5 billion kroner.
“Despite our actions showing good results to date, several external factors have impacted our liquidity position,” said acting CEO Geir Karlsen. “The actions we are now taking, are necessary to create financial headroom to make sure that we have sufficient liquidity as we enter the next chapter of Norwegian.”