Struggling Norwegian Air launches shares issue, bond
By Gwladys Fouche and Terje Solsvik OSLO (Reuters) - Norwegian Air is planning a share issue and a $175 million (£136 million) bond, raising enough cash to meet the struggling budget airline's needs through 2020 and beyond, it said on Tuesday. The share issue will be its third in less than two years. With mounting debts and suffering from the grounding of its 18 Boeing 737 MAX aircraft, Norwegian has this year replaced breakneck expansion with cost cutting in a bid to regain profitability
By Gwladys Fouche and Terje Solsvik
OSLO (Reuters) - Norwegian Air
The share issue will be its third in less than two years.
With mounting debts and suffering from the grounding of its 18 Boeing
"After the completion of the transactions, Norwegian is fully funded through 2020 and beyond based on the current business plan," Europe's third-largest budget airline by passenger numbers said in a statement.
It said it was considering a private placement of up to 27.25 million new shares and a bond issue of up to $175 million.
The deals together could raise close to 2.9 billion Norwegian crowns (£245 million) if the shares are sold at current market prices, a Reuters calculation showed, although the company might have to sell at a discount.
"The proceeds ... will secure required financing of working capital during the winter season and create headroom to financial covenants while completing the strategic transformation of the company," it said.
The airline also reported October traffic figures on Tuesday, before the scheduled release on Wednesday.
Passenger traffic declined in October from a year ago, its monthly report showed, the first such fall on record as the carrier cut loss-making routes from its network.
Overall traffic, a measure of distance flown and the number of people carried (RPK), fell 3% year on year in October, the company said. Analysts in a Reuters poll on average had expected a fall of 12.1%.
(Reporting by Terje Solsvik and Gwladys Fouche; Editing by Edmund Blair)
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