OSLO (Reuters) – Norwegian Air (NWC.OL) has fulfilled the first condition for taking part in a government-led rescue package for the airline industry, securing an initial cash infusion of 300 million Norwegian crowns ($26.63 million), the budget carrier said.
Norway said on March 19 Norwegian Air could obtain credit guarantees worth up to 3 billion crowns to help weather the coronavirus crisis, but the airline must first meet a series of conditions.
Norwegian, which has grounded most of its aircraft and temporarily laid off 90% of staff, or about 7,300 people, had said it needed access to cash “within weeks, not months”.
The condition for receiving the first 300 million crowns from the package was that commercial lenders were willing to supply 10% of that amount while the government would provide the remaining 90%.
“Norwegian is pleased to announce that two Nordic banks have obtained credit committee approval to provide a guarantee for the required 10%,” the company said in a statement.
“Norwegian will secure the necessary headroom to pursue further guarantees from the Norwegian government,” it added.
To receive the full 3 billion crowns however, the company must first persuade creditors to postpone installment payments for loans and forego interest payments for three months, and the company must also boost its equity.
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