May 20, 2020 / 7:18 AM / 6 days ago

Norwegian Air gets $271 mln state-backed loan after debt restructuring

OSLO, May 20 (Reuters) - Budget airline Norwegian Air has secured a long-sought credit guarantee from Norway's government after completing a debt restructuring, it said on Wednesday, allowing it to survive in a slimmed-down version.

Following the grounding of almost all its fleet due to the coronavirus pandemic, the company had said it would run out of cash in mid-May unless it was able to qualify for the 2.7 billion Norwegian crowns ($271 million) state package.

The government in a separate statement confirmed the airline would get the guarantee. Norwegian had already secured a $30 million payout at an earlier stage, taking the overall loan to $301 million.

Bondholders, lessors and shareholders agreed in recent weeks to a 12.7 billion crowns debt conversion and share sale that boosted Norwegian's equity ratio to 17% from 4.8% at end-2019, exceeding the minimum government requirement of 8%. ($1 = 9.9751 Norwegian crowns) (Reporting by Terje Solsvik, editing by Louise Heavens)

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