Norwegian Air Shuttle announced a 3 billion kroner ($353 million) rights offering on Tuesday.
The offering, which amounts to approximately half of its market capitalization prior to the announcement, is sufficient to keep the carrier in business through winter without breaching its debt covenants.
The move comes days after British Airways parent IAG said it had broken off talks on a potential takeover.
The rights issue was underwritten by investors including shipping magnate John Fredriksen who, before abandoning his Norwegian citizenship, was the wealthiest man in the country.
“I’ve known John Fredriksen for a long time, and we even have a CFO who has worked for Fredriksen,” the airline’s CEO, Bjorn Kjos, told reporters in Oslo. “We’re very happy to have the Fredriksen group as a part of that guarantee consortium.”
The deal calls for Norwegian to rein in its ambitious growth plans in order to focus on profitability.
“The Company intends to capitalize on the market position and scale built up over the last years,” it said in a statement. “Capital expenditures will be reduced,” it added, which will include aircraft divestment and an “extensive” cost-reduction program.
(Photo: Accura Media Group)