Icelandair Group is planning to issue up 30 billion new shares to support its financial position, with the aim of raising up to $200 million in equity.

The company has about 5.4 billion shares in issue, giving it a market capitalisation of around IcKr12.9 billion ($88.6 million).

Icelandair Group has submitted a proposal ahead of a shareholders’ meeting on 22 May and says it intends to offer the new shares in June.

Once it has secured approval it will disclose the price of the issue. At the current stock price of IcKr2.37, the figure of $200 million equates to 12.2 billion shares.

Icelandair Group has proposed to open up the issue to the public and other investors through a waiver of the pre-emptive rights of current shareholders.

The board will have “unilateral authority” to determine the allocation of the new shares, it adds, but efforts will be made to provide “full allotment” to existing shareholders and employees.

Icelandair Group is also looking at the possibility of converting liabilities into equity.

It has received signals that the government is willing to consider granting a credit line or guarantee to the company, under certain conditions – including completion of the share offer.