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OSLONorwegian Air Shuttle launched an emergency rescue plan on Thursday to save the struggling airline, unveiling proposals to downsize its fleet and raise new money from investors.

It follows the filing for protection from creditors last month in Ireland under that country’s equivalent of Chapter 11 as it became aviation’s largest casualty of the pandemic.

Norwegian’s fate was sealed when Norway’s center-right government refused to offer a second bailout, triggering the latest proceedings. The company used Ireland to seek creditor protection as its subsidiaries there hold most of its aircraft.

The company’s shares have plunged 99 percent in the past year, wiping out shareholders, as the stock was briefly suspended.

Norwegian’s board proposed “reconstructing” the airline's balance sheet by reducing the size of its fleet, launching a new debt-for-equity swap and a rights issue of up to NKr4bn ($453m) in the form of new stock or hybrid instruments.

The debt-for-equity swap, which would be its second of the year, would include aircraft financing liabilities, supplier liabilities, and bond obligations.

As part of the proposals, Norwegian said it could also only pay aircraft lessors when it used their planes to help it conserve cash, a so-called “power by the hour” deal.

The company did not give any details as to the possible scale of the debt-for-equity swap, how many planes it could end up flying under the plan, or how many jobs are at risk.

The proposals will be put forward at an extraordinary general meeting on December 17.#
Via (Financial Times)
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