Irish judge extends Norwegian’s debt restructuring

An Irish High Court judge has extended by 30 days, until February 25, the examinership process currently underway to protect Norwegian (DY, Oslo Gardermoen) from creditors, restructure its debts, and finalise a rescue plan, the airline confirmed in a stock exchange filing. Justice Michael Quinn granted the extension following a request from Kieran Wallace of KPMG, the examiner overseeing the process. Paul Sreenan, Wallace’s senior counsel, told the court that such a move would be “more advantageous” to creditors, the Irish Times reported. “[Norwegian] is in discussions with a number of investors and they are confident about that investment being forthcoming,” he said. Norwegian initiated the examinership process in Ireland in November, asking the court to oversee a restructuring of its debts in an effort to prevent collapse. On January 14, it presented a new business plan dropping its long-haul operations to focus on a simplified business structure and short-haul network. Last week, Norway’s government said it supported the plan and may contribute with a hybrid loan if private investors invest too. To approve the restructuring, the court in Dublin must be convinced that Norwegian’s survival is better for creditors than winding up the company. A court in Oslo would also have to approve such a ruling. Sreenan argued in court that the airline had a reasonable prospect of survival. USD2.5 billion of the group’s debt has been discharged, he said, and the company’s business plan involves raising up to USD590 million. The company had debts and liabilities of NOK66.8 billion kroner (USD7.8 billion) at the end of September 2020, a load it plans to cut to around NOK20 billion (USD2.3 billion) as part of the restructuring. It also aims to initially cut its fleet to about 50 aircraft from 138 today. Under Irish law, courts appoint examiners to troubled companies for 70 days, with the option of extending this to 100 days. According to the Irish Times, none of the creditors represented – including AerCap, BOC Aviation, Airbus, and Boeing – objected to the motion to extend the examinership.