Norway

Norwegian Air has asked an Irish court to oversee a restructuring of its massive debt as it seeks to stave off collapse amid the coronavirus pandemic, the carrier said on Wednesday, Reuters reported. Norway’s government on Nov. 9 rejected the airline’s plea for another injection of state funds, and the company said the following day it was at risk of having to halt operations in early 2021 unless it got access to more cash. Growing rapidly to become Europe’s third-largest low-cost airline and the biggest foreign carrier serving New York and other major U.S.

Pandemic-hit Norwegian Air faces a battle for survival this winter, it said on Monday after the country's government declared that it will not provide additional financial support for the cash-strapped carrier, Reuters reported. Norwegian Air, which has been hit hard by the coronavirus crisis and has grounded most of its fleet, said in August that it would run out of cash in the first quarter of 2021 unless it could secure fresh funds and has held talks with the government in the hope of winning support.

Norway's government has extended loan guarantees for the country's airlines, including Norwegian Air, by two months until the end of 2020, the Industry Ministry said on Sunday, Reuters reported. Norwegian Air secured a state aid package of 3 billion Norwegian crowns ($330 million) earlier this year after a debt restructuring but said last month it needed to secure more funding to get through the COVID-19 pandemic. The government has changed the terms of the state guarantee scheme, the industry ministry said in a statement, without disclosing specifics.

A group of Seadrill’s creditors have agreed to let the offshore drilling rig operator suspend interest payments this month as part of an ongoing effort to restructure its $7.3 billion debt, the Oslo-listed company said on Wednesday, Reuters reported. Seadrill, which has so far failed to convince its 43 bank lenders to permanently adjust the terms of its loans, reiterated earlier warnings that a debt restructuring could leave current shareholders with minimal or no ownership at all.

Norwegian Air, which is attempting to secure a second round of financial restructuring, saw a 91% decline in August passenger volume from a year earlier as most of its fleet remained grounded by the coronavirus pandemic, it said on Friday, Reuters reported. The budget carrier has said it will fly 25-30 of its aircraft in the months ahead, while more than 100 remain parked. Creditors and lessors took control of Norwegian in May with a financial rescue that allowed it to access state-guaranteed loans of 3 billion Norwegian crowns ($336 million) and thus prevent a collapse.

Norwegian Air Shuttle ASA said it will need more funds to avert insolvency and announced plans to scale back the discount long-haul operations that it pioneered in order to survive, Bloomberg News reported. The beleaguered carrier, which reported a pre-tax loss of 4.8 billion kroner ($541 million) for the first half, said it will require additional working capital in the first quarter of 2021 to meet its obligations and will consider another private placement of shares as well as selling assets.

Norway’s gross domestic product contracted in the second quarter at the fastest pace ever recorded as efforts to contain the coronavirus plunged the economy into a deep recession, data from the national statistics office (SSB) showed on Tuesday, Reuters reported. The mainland economy, which excludes oil and gas production, shrank by 6.3% in the April-June period from the preceding three months, lagging a forecast of minus 6.1% in a Reuters poll of economists. “The decline in the Norwegian economy in the second quarter was the deepest ever recorded,” SSB said in a statement.

Scandinavian budget carrier Norwegian’s Swedish division has been denied a credit guarantee by the Swedish national debt office, FlightGlobal reported. The office states that it has “decided to reject” the application because guarantees can only be granted to airlines considered financially viable on 31 December 2019. It says there was a “very high risk” at the time – even before the air transport downturn – that Norwegian would not be able to meet its financial obligations, and that it would not be able to manage further debt.

Norwegian Air Shuttle ASA dropped as much as 60% after completing a recapitalization that hands control of the company to aircraft lessors and bondholders, Bloomberg News reported. Investors had in recent days stubbornly traded Norwegian’s shares far above the price of a discounted equity issue that came on top of an $830 million debt conversion.

Norway’s central bank cut interest rates to a record low of zero but said it was unlikely to go negative as the rich Scandinavian country faces up to the twin shocks of coronavirus and an oil price collapse, the Financial Times reported. Norges Bank said on Thursday that the 0.25 percentage point cut would not prevent Covid-19 from having “a substantial impact on the Norwegian economy but can help dampen the downturn”, including by stopping high unemployment becoming entrenched.