Icelandair Group provides update on financial restructuring as a result of COVID-19 effect.
NORDIC BUSINESS REPORT-June 17, 2020-Icelandair Group provides update on financial restructuring as a result of COVID-19 effect
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Icelandair Group hf (ICE:ICEAIR), an Icelandic travel industry corporation and the owner and holding company of the airline Icelandair, announced on Tuesday that discussions with the government of Iceland regarding a potential government guaranteed credit line have been progressing according to plan.
Reportedly, the government has expressed its intent to participate in the restructuring of Icelandair Group contingent, among other things, on the participation of all stakeholders and the successful conclusion of the planned share offering.
According to the company, as presented at its shareholders' meeting on 22 May 2020, the company aims to complete a voluntary financial restructuring with the participation of its stakeholders and the Icelandic government. These stakeholders include unions, Boeing, lenders, lessors, credit card acquirers, hedging counterparties and other vendors.
Following signing of all major agreements, the company intends to raise new capital through a share offering. The goal of the financial restructuring is to secure current operations, strengthen the liquidity and ensure the future competitiveness of the company amid the COVID-19 pandemic.
Under the update, Icelandair said that negotiations with the pilots and aircraft mechanics unions have been successfully completed. However, negotiations with FFI (The Icelandic Cabin Crew Association) stalled approximately three weeks ago without any significant progress having been made since then, which is of concern.
Also, negotiations with Boeing regarding future deliveries of the Boeing MAX aircraft and further compensation due to the grounding of the aircraft are progressing. Negotiations with lenders, lessors, credit card acquirers, hedging counterparties and other vendors are ongoing.
The objective of the negotiations is to restructure contracted cash outflows to match expected future cash inflows.
Icelandair Group added that the indicative timeline presented at the shareholder's meeting called for a signing of agreements with key stakeholders by 15 June 2020. As discussions with stakeholders stand, this milestone has been revised to 29 June 2020. An updated timeline regarding the share offering will be presented when agreements with stakeholders are in its closing stages.
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|Publication:||Nordic Business Report|
|Date:||Jun 17, 2020|
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