Norwegian Air to Sell Five Jets to Shore Up Stretched Finances
(Bloomberg) -- Norwegian Air Shuttle ASA agreed to sell five Airbus SE A320neo narrow-body planes in a move that will boost liquidity amid a cash squeeze and rising oil prices.
The discount carrier’s Arctic Aviation Assets unit signed an accord covering the jetliners, which are currently leased out to another operator, Norwegian said Friday, without naming the buyer. The deal will lift liquidity by $62 million after the repayment of debt, and have a positive equity effect.
“Sale proceeds will be used to repay debt and to increase the company’s liquidity,” the company said in a statement, adding that the planes will be delivered in the fourth quarter.
Norwegian Air is taking a raft of measures to help its stretched finances cope with the winter slowdown as higher fuel prices add to the strain of what’s already the toughest time of the year for airlines. Chief Financial Officer Geir Karlsen said Tuesday that the carrier will also idle planes and trim capacity, deepen a cost-cutting program, and boost hedging measures. It sold six Boeing Co. 737s in August and two last month, and said it was looking at offloading the five Airbus A320s.
The Nordic company, which has rejected takeover approaches from British Airways owner IAG SA and also attracted interest from Deutsche Lufthansa AG, has been working to create a fleet joint venture with an unnamed partner that would take over cash obligations on its mammoth aircraft order book.
The deal would include an 8 billion kroner ($960 million) injection to help cover payments for Boeing and Airbus aircraft, people familiar with the matter have said, easing the financial burden on the discount carrier.
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