Icelandair to raise its share capital to $274mn

Icelandair Group shareholders are to vote on a proposal to increase the company’s share capital by ISK5.6 billion krona (USD45.1 million), to ISK34 billion (USD274.2 million) in relation to a subscription agreement made with Ireland’s Blue Issuer Designated Activity Company (DAC), and affiliates, along with a proposal to issue ISK1.4 billion (USD11.4 million) in warrants in relation to a subscription agreement made with the Irish financial service firm.

The vote will take place electronically during an online shareholders´ meeting on July 23, 2021, the company announced in a statement.

The Board of Icelandair Group proposes to increase the company‘s share capital from ISK28.4 billion (USD229 million) to ISK34 billion (USD274.2 million), by issuing new shares.

According to an agreement to subscribe for shares dated June 23, 2021, Blue Issuer DAC has agreed to subscribe for 5,659,094,470 shares in the company at a price of ISK1.43 (USD0.008) per share, which corresponds in total to ISK8 billion (USD64.5 million). The agreement only becomes binding and effective if the share capital is raised by at least ISK5.6 billion. It also depends on the passing of the proposals submitted at the shareholders‘ meeting. The new shares will be of the same share class as other outstanding shares in the company. The shareholders waive their pre-emptive rights to the new shares. The new shares shall provide the associated right to the company from the date of registration.

The Board also proposes to issue warrants to Blue Issuer DAC corresponding to up to ISK1.4 billion (USD11.2 million) in nominal terms.

Subscription rights under the warrants may be exercised all at once following the publishing of the company‘s 2Q 2022 interim financial accounts for a period of 10 days. Each warrant allows for the subscription of one new share in the company at the price of ISK1.43 (USD0.008) per share plus 15% annual interest calculated according to the “30/360-day convention” from the issuance date of the warrant until the date falling 10 days after the publishing of the company‘s 2Q 2022 interim financial accounts.

The board is furthermore authorised until September 30, 2022, to increase the company’s share capital in relation to the exercise of the warrants. The shareholders waive their pre-emptive rights to the warrants and shares issued in relation to their exercise.

The agreement is subject to Blue Issuer DAC nominating one board member. It has duly nominated Bain Capital Credit Managing Director, Matthew Evans, based in New York. In light of this, Icelandair chairperson Úlfar Steindórsson will step down as a board member.

As previously reported, Bain Capital will acquire a 16% stake in Icelandair in exchange for acquiring the 5.6 billion new shares. The move is aimed at strengthening the group’s financial position for future growth.