June 9, 2020 / 12:58 PM / 23 days ago

Norwegian Air seeks approval to raise cash quickly if needed

FILE PHOTO: Norwegian Air Sweden Boeing 737-800 plane SE-RRJ approaches Riga International Airport in Riga, Latvia January 17, 2020. REUTERS/Ints Kalnins/File Photo

OSLO (Reuters) - Norwegian Air (NWC.OL), which has grounded most of its fleet due to the COVID-19 outbreak, is seeking approval from shareholders to potentially issue more shares at short notice as part of its recovery plan, the budget airline said on Tuesday.

“There is no doubt that leisure traffic will rebound before business travel and we will be perfectly placed to strategically and geographically take advantage of this,” Chief Executive Jacob Schram said in a statement.

Creditors and owners recently completed a 12.7 billion Norwegian crowns ($1.36 billion) debt conversion and share sale that boosted the airline’s equity, and secured loans of 3 billion crowns from Norway’s government.

Due to the prevailing uncertainty, however, it may again become necessary for the board of directors to issue new shares or convertible loans over the course of the next year, Norwegian said, ahead of its June 26 annual general meeting.

“In this context, the board of directors proposes that it be granted wide authorizations to issue new shares and convertible loans,” the company said, while adding a share issue could expand the current capital by up to 50%.

Norwegian currently only operates seven of its nearly 150 aircraft but has said it aims to begin rebuilding no later than in 2021 with the aim of eventually flying 110-120 planes, including a scaled-down version of its long-haul operation.

Reporting by Terje Solsvik and Victoria Klesty; Editing by Mark Potter

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