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Norwegian open to 'consolidation' talks after IAG exit

Norwegian remains willing to "engage in consolidation discussions" after IAG's recent confirmation it will not bid again for the carrier, but says no such talks are currently ongoing.

The low-cost carrier says that while a planned NKr1.3 billion ($353 million) share issue will increase its "competitiveness and stand-alone financial strength, its board remains open to discussion that can "develop shareholder value in Norwegian".

Earlier this month IAG confirmed that it planned to sell its 3.93% stake in Norwegian, bought in support of two takeover offers made last spring, and that it would not be seeking to make a third bid for the carrier.

Following IAG’s acquisition of what was then a 4.6% stake in the airline in April 2018, Norwegian said it received approaches from "several parties" who expressed an interest for "structural transactions", financing the carrier and in various forms of "operational and financial cooperation",

It says discussions with such parties have been ongoing on "several levels and with different approaches".

Norwegian says that due to issues including "severe delays" in aircraft and engine deliveries experienced last year, it has for some time been assessing its financing needs and financing alternatives, including raising equity.

As a result, it secured "stand-by" underwriting commitment for a NKr3 billion rights issue during the fourth quarter of 2018. However, during that period and through December 2018, Norwegian says it was not in a position to raise equity while being engaged in "new, concrete and specific" negotiations related to the acquisition of the shares of the company. No such discussions are currently ongoing, it adds.

The carrier now intends to issue new shares next month and has called an extraordinary general meeting to put this to shareholders.

The airline, which will post an operating loss in 2018, has also announced plans to defer and divest aircraft as it aims to reduce capital expenditure and cut costs as part of a strategic switch in focus "from growth to profitability"

Shares in Norwegian fell around again today in morning trading, having previously dropped sharply on 24 January after IAG formally confirmed it would not be rebidding.

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