Norwegian shares plunge as it reveals need for more cash
Published on Wednesday, November 6, 2019
Budget airline Norwegian Air saw its shares plunge more than 9% today after it launched its third share sale in two years.
The airline sold 27.25 million new shares at 40 krona per share to raise about £211.5 million.
It raised a further $150 million through a convertible bond issue. Norwegian said the money will see it through 2020.
“The private placement received significant interest from both existing shareholders in the company and new high-quality investors. The convertible bond issue received significant interest from international and domestic investors,” the airline said in a statement.
Norwegian Air is also attempting to cut costs after the grounding of its 18 Boeing 737 MAX aircraft forced it to shelve expansion plans.
In October it entered into a joint venture with a subsidiary of China Construction Bank to add 27 Airbus aircraft to its fleet.
The Chinese bank will own 70% of the venture, which will allow Norwegian to buy the A320neo aircraft between 2020 and 2023.
Norwegian said the deal would ease financial pressures by cutting its capital expenditure by $1.5 billion.