Norwegian Air’s third fundraising from investors in 20 months could be the airline’s final chance to prove it can make money from cheap transatlantic air travel, one of its major shareholders has said. Shares in the budget airline fell around 10% after it raised $272 million from a discounted sale of shares, as well as a convertible bond issue. The move was the latest by acting CEO Geir Karlsen and Chairman Niels Smedegaard, both appointed earlier this year, to try to prevent Norwegian from joining the ranks of airlines that have collapsed due to industry overcapacity. Norwegian, which has also been hit by the grounding of Boeing’s 737 MAX jet, has raised 5.4 billion crowns from its shareholders since March 2018, including 1.3 billion last year and 4.1 billion this year, in addition to the new bond sale. Norwegian fund Sissener AS, which invested in the share issue and convertible bonds, said the additional funds had significantly improved Norwegian’s prospects, although it still needed to demonstrate it can generate cash.
- Reuters -