Last month they were in talks to be nationalized. The Norwegian government decided not to extend a second bailout to the low cost carrier. And now Norwegian Air has filed for bankruptcy reorganization in Ireland, where its aircraft assets are held.
Norwegian was exceptionally weak before the pandemic, but their financial maneuverings had positioned them so that a strong summer would give them runway to make it through the lean winter. Covid precluded that strong summer. On March 6 I identified Norwegian’s failure as a coronavirus risk. Earlier they declared four subsidiaries bankrupt.
Following the government of Norway’s decision to withhold further support from the airline, and the ongoing COVID-19 pandemic, Norwegian Air Shuttle ASA has decided to initiate an examinership process in Ireland relating to its subsidiary Norwegian Air International Limited (NAI), its wholly-owned asset company Arctic Aviation Assets DAC (AAA) and some of AAA’s subsidiaries; Norwegian will also enter in and get protection of the Irish Examinership process as a related party.
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The airline expects a 5 month bankruptcy process. The business continues in its limited Covid state in the meantime. They believe they have the cash needed to see themselves through reorganization. Will they be able to attract additional exit financing, even if they manage to discharge some of their debts?