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Norwegian puts up slots to delay bond repayment

Scandinavian budget carrier Norwegian is putting up slots at London Gatwick as part of an exchange package as it seeks to delay repayment of unsecured bonds.

The airline says it is requesting extension of the maturity dates for two sets of unsecured bonds – designated NAS07 and NAS08 – until November 2021 and February 2022.

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These bonds originally had due dates of December 2019 and August 2020.

Norwegian says the request to delay the repayment is intended to "ensure successful operations" and provide "adequate liquidity headroom".

It points out that the value of the Gatwick slot portfolio exceeds that of the $380 million nominal value of the bonds.

The airline stresses that it operational performance "continues to improve" with projected earnings of NKr6-7 billion ($658-768 million) at EBITDAR level for the year, despite the impact of the Boeing 737 Max grounding and the technical issues affecting its Rolls-Royce Trent-powered Boeing 787s.

But Norwegian says that, while it has been making "significant" progress, its working capital has been "negatively affected" – to around NKr1.5 billion – by the aircraft problems.

"In addition, terms in the credit-card acquirer market have tightened," it adds, putting the impact of amounts not received from these acquirers at NKr4 billion during the second quarter.

Norwegian says the seasonality of its operations means it needs to build liquidity reserves before the weaker winter period. It has already agreed to sell its shareholding of an internal bank, and it is also discussing deferral of payments to lessors.

It has proposed sweeteners to bondholders, alongside the slots package. Bondholders are set to meet on 16 September.

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