PLAY’s Major Shareholders Commit $19 Million to Support Icelandic Carrier’s Growth

PLAY, the Icelandic low-cost airline, has announced a significant financial boost with its largest shareholders agreeing to inject nearly 575 million new shares, translating to a total subscription value of ISK2.59 billion Icelandic krónur (USD18.8 million). This commitment is part of a larger fundraising initiative aimed at securing a minimum total capital of ISK4 billion (USD29 million), including an additional ISK1.41 billion (USD10.2 million) expected from other investors.

The airline is set to engage in discussions with both existing shareholders and potential new investors to meet this target. The capital increase is subject to approval at the upcoming annual general meeting scheduled for March 21, 2024. The investment aims to support PLAY’s strategic growth plans and operational stability amidst the competitive aviation landscape.

Although the identities of the subscribing shareholders were not disclosed, PLAY highlighted that the offer was initially extended to investors holding securities worth at least EUR100,000 (USD108,000). With a diversified ownership structure, PLAY’s shareholder base primarily consists of various funds and financial institutions located in Iceland, with the Leika fjárfestingar fund being the largest individual shareholder, holding a 10.8% stake.

PLAY also outlined its intention to provide detailed terms of the capital increase program and its ambition to uplist to the Nasdaq Main Market in Iceland by the end of February 2024. The carrier expressed openness to exploring different funding mechanisms, including mezzanine financing, but has prioritized capital investments over borrowing as the preferred method of financing its operations at this stage.

Despite the decision to pause fleet expansion to conserve liquidity amid increasing cost pressures, PLAY reassures stakeholders that its current cash position aligns with strategic plans and does not jeopardize the airline’s operational integrity. This financial reinforcement underscores the confidence of PLAY’s major shareholders in the airline’s business model and growth trajectory, positioning the carrier for continued success in the dynamic aviation market.