Norwegian Air sets big discount for share sale
By selling new shares far below the current market price, Norwegian will boost the value of each of the purchasing rights
Oslo — Norwegian Air will sell new shares at just a third of the current market price when the loss-making airline seeks to raise money from its owners in the next few weeks, it said on Monday. Norwegian Air said on January 29 it planned to raise 3-billion Norwegian krone ($348m) in a share sale to bolster its finances, just days after British Airways owner IAG ruled out a bid for the budget airline. Norwegian is trying to replicate in transatlantic flights the low-cost model that dominates the short-haul market via companies such as Ryanair and easyJet, but is struggling to make the business profitable. The European airline sector is struggling with overcapacity and high fuel costs, with several companies going out of business, the latest being British budget airline Flybmi, which filed for bankruptcy on Sunday. In the rights issue, Norwegian’s shareholders will get two subscription rights to buy shares for every share they own, and new shares will be sold at 33 krone each, compare...
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