Norwegian Air granted creditor protection by Irish court
Norwegian Air has today been granted protection from its creditors by an Irish court, giving the embattled carrier some breathing space as it seeks to restructure its whopping debt pile.
Under the process, which is called “examinership”, the Scandinavian flier now has until 26 February before its creditors can seek to claim their money.
The judge said that he had agreed to the protection of Norwegian as well as its Irish subsidiaries as their respective survivals rely on each other.
Michael Quinn ruled: “I have concluded in this case that it is appropriate to appoint an examiner both in relation to the five petitioner companies and also in relation to the related company Norwegian Air Shuttle ASA.”
The decision comes as a relief to the carrier, which has been among the worst effected by the coronavirus pandemic.
Last month it sought legal protection after the Norwegian government decline to extend a second round of state support to the carrier.
At the moment, just six of its 140 planes are currently flying, with a number rival low-cost carriers poised to swoop into the market.
For the third quarter, passenger numbers were down 91 per cent, forcing the carrier to furlough even more of its employees.
More pressingly, its debt pile – which analysts had flagged as a cause for concern even before the pandemic – currently stands at $7.7bn.
Last week Norwegian said that it was looking to raise £340m in a package of debt conversion, aircraft divestment and sale of new equity in order to recapitalise the firm.
“The company asks for the continued support of its shareholders to prepare for future capital increases in parallel with the restructuring of its balance sheet through the above legal proceedings”, Norwegian said in a statement.