Danske Bank: Norwegian Air Shuttle presents indicative plan for reconstruction

NAS has published a an indicative plan for the reconstruction. This includes a plan to operate a European short haul network (no long haul) with around 50 aircraft in 2021 and increase that number to around 70 in 2022. NAS targets to reduce its debt to around NOK20bn and raise NOK4-5bn in new capital through a combination of a rights issue to current shareholders, a private placement and a new hybrid instrument. According to the plan existing creditors have the following options: A) take no action. These creditors will receive a dividend (level unknown) from the Examinership in the form of a subordinated hybrid loan with a maturity date of 10 year – which is convertible into shares of NAS before 30. August 2021. B) subscribe for the new perp bond. Each existing debt claim can be converted into the new bond in an amount to 150% of their subscription – the bond will be non-amortising and interest free which shall be repaid in full on 30 december 2026. Minimum subscription is EUR150.000 in NOK. C) Subscribe for new shares in the private placement (only for creditors with claims that do not exceed EUR100.000. Overall NAS expects new investors in the NOK4-5bn rights offering to hold approx. 70% of the share capital in NAS post the reconstruction, impaired creditors are expected to hold approx. 25% and existing shareholders 5%. NAS states that terms are indicative and non-binding. Clearly the coming weeks will see negotiations among the Examinar and creditors in order to find a solution.