Sweden rejects Norwegian funding, EC blesses SAS refinancing

Sweden’s National Debt Office has rejected a request by Norwegian (DY, Oslo Gardermoen) for a state-guaranteed loan, it announced in a statement on August 18, renewing liquidity concerns for the cash-strapped carrier. The Ministry of Finance body explained that the Swedish government had tasked it with issuing credit guarantees for loans to airlines that, on January 1, 2020, had a Swedish licence to conduct commercial aviation operations and which currently have their main operations in Sweden or are domiciled there. “The Debt Office’s assessment in regard to Norwegian is that as of December 31, 2019, there was a very high risk that Norwegian would not be able to fulfil its financial commitments and that the company was not deemed capable then of managing further indebtedness,” the statement said. “Therefore, the company has not been considered financially viable as of December 31, 2019. Accordingly, Norwegian’s application has been denied.” A Norwegian spokesman told Reuters that it was hard to understand the decision when Sweden had given such a loan guarantee to its Nordic rival SAS Scandinavian Airlines (SK, Copenhagen Kastrup). “We meet all of the requirements, so the only way to interpret this rejection is that the authorities do not want competition in Sweden,” he said. Norwegian has already warned it will need more cash if it is to rebuild after the coronavirus crisis. In May, the Norwegian government said it would provide emergency financial guarantees, but only after the company raised cash from its owners and forced creditors to convert part of its debt into equity.