Norwegian Air stability through summer?
Feb 14, 2019, 10:10 am
#61
Join Date: Sep 2004
Location: YUL
Posts: 1,001
Didn't say I was worrying, but I am 100% aware of what could happen, and what will inevitably happen. Insure yourself well, and have a plan B in case you get stranded abroad. I have been due to both Icelandic volcanoes, that taught me to be way more proactive when things go wrong.
Feb 14, 2019, 6:32 pm
#63
FlyerTalk Evangelist
Join Date: Mar 2000
Posts: 17,419
No guarantees, but I like your odds for June. Not that I'd buy a ticket (well, maybe for $99) but I like your odds. It's beyond summer when I'd have more worries. FWIW, I flew Air Berlin transatlantic about 2 months before they went belly up. The flight was fine. And then they were gone. It will likely be the same.
Feb 14, 2019, 7:51 pm
#64
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,536
It was released on Feb 7.
Report: https://www.norwegian.com/globalasse...018-report.pdf
Slide deck presentation: https://www.norwegian.com/globalasse...esentation.pdf
Q4 Earnings Call video: https://video.qbrick.com/play2/embed...&sharing=false
You can find these on the Norwegian Air website under Investor Relations then 2018 reports and presentations
Report: https://www.norwegian.com/globalasse...018-report.pdf
Slide deck presentation: https://www.norwegian.com/globalasse...esentation.pdf
Q4 Earnings Call video: https://video.qbrick.com/play2/embed...&sharing=false
You can find these on the Norwegian Air website under Investor Relations then 2018 reports and presentations
Feb 14, 2019, 10:51 pm
#65
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,536
No guarantees, but I like your odds for June. Not that I'd buy a ticket (well, maybe for $99) but I like your odds. It's beyond summer when I'd have more worries. FWIW, I flew Air Berlin transatlantic about 2 months before they went belly up. The flight was fine. And then they were gone. It will likely be the same.
If the secondary offering goes poorly, they could violate bond covenants on March 31st. That should trigger liquidation. If they're able to get past that hurdle, they're likely good for the summer.
Feb 15, 2019, 12:07 am
#66
Original Poster
Join Date: Jan 2013
Posts: 69
The stock has dropped ~20% since the earnings call. Norwegian needs a successful $300 million secondary stock offering in order to meet bond covenants.
If the secondary offering goes poorly, they could violate bond covenants on March 31st. That should trigger liquidation. If they're able to get past that hurdle, they're likely good for the summer.
If the secondary offering goes poorly, they could violate bond covenants on March 31st. That should trigger liquidation. If they're able to get past that hurdle, they're likely good for the summer.
Feb 15, 2019, 6:27 am
#67
Original Poster
Join Date: Jan 2013
Posts: 69
https://www.usatoday.com/story/trave...er/2873389002/
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Feb 15, 2019, 9:04 am
#68
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Join Date: Jun 2018
Posts: 1,186
https://www.usatoday.com/story/trave...er/2873389002/
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Feb 15, 2019, 9:13 am
#69
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Join Date: Aug 2010
Location: DCA
Programs: UA US CO AA DL FL
Posts: 50,262
https://www.usatoday.com/story/trave...er/2873389002/
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Feb 15, 2019, 11:51 am
#70
Join Date: Oct 2018
Location: Bay Area, CA
Posts: 223
https://www.usatoday.com/story/trave...er/2873389002/
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Norwegian just announced a few new routes between Europe and the US - sounds like seasonal routes starting this summer. This seems contradictory to the doom and gloom above.
Feb 15, 2019, 2:44 pm
#71
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,536
March 31 is the key upcoming financial date for Norwegian; it's the date I've seen mentioned with respect to bond covenants.
As far as the secondary offering, page 22 of the Q4 presentation has the details, here: https://www.norwegian.com/globalasse...esentation.pdf
Here's a few bullet points from page 22:
Key dates:
Key terms of the rights issue to be set: On or about 18 February 2019
EGM: 19 February 2019
Shares traded exclusive of subscription rights: On or about 20 February 2019
Subscription period: Expected 22 February 2019 - 8 March 2019
Final result/allocation: On or about 11 March 2019
EGM = Extraordinary General Meeting … this is for the secondary offering (rights issue)
On the earnings call, they said they had commitments for 1 Bn of the 3 Bn offering. However, the stock has dropped (as of today) 25% since the earnings call. With each drop, that means they have to issue even more shares to net 3B NOK. This is looking like a massive stock dilution. It should be noted that they did this same thing - issuing more stock - in 2018.
As far as the secondary offering, page 22 of the Q4 presentation has the details, here: https://www.norwegian.com/globalasse...esentation.pdf
Here's a few bullet points from page 22:
Key dates:
Key terms of the rights issue to be set: On or about 18 February 2019
EGM: 19 February 2019
Shares traded exclusive of subscription rights: On or about 20 February 2019
Subscription period: Expected 22 February 2019 - 8 March 2019
Final result/allocation: On or about 11 March 2019
EGM = Extraordinary General Meeting … this is for the secondary offering (rights issue)
On the earnings call, they said they had commitments for 1 Bn of the 3 Bn offering. However, the stock has dropped (as of today) 25% since the earnings call. With each drop, that means they have to issue even more shares to net 3B NOK. This is looking like a massive stock dilution. It should be noted that they did this same thing - issuing more stock - in 2018.
Feb 15, 2019, 5:06 pm
#72
Original Poster
Join Date: Jan 2013
Posts: 69
Right so this is the part I'm interested in. If the secondary offering "ends" (if I'm reading this right) on 8 March, and results on 11 March, won't we know by then if the airline can continue operations through summer?
Feb 15, 2019, 7:03 pm
#73
Join Date: Dec 2011
Location: DTW
Programs: TK E+, WY, Radisson R
Posts: 2,360
I have booking of 1 way ticket during the summer (KEF-BGO) and I'm considering buying another FI ticket and try to get the taxes and bag fee back from Norwegian booking ... or simply outright abandoning the ticket. Given FI flight will save me money on car rental during stay in Reykjavik.
If I sit back and watch the airfares (FI) will rise significantly, I barely got the W fare on another FI flight which next bucket is T (fares doubles).
If I sit back and watch the airfares (FI) will rise significantly, I barely got the W fare on another FI flight which next bucket is T (fares doubles).
Feb 19, 2019, 7:18 am
#74
FlyerTalk Evangelist
Join Date: Mar 2000
Posts: 17,419
March 31 is the key upcoming financial date for Norwegian; it's the date I've seen mentioned with respect to bond covenants.
As far as the secondary offering, page 22 of the Q4 presentation has the details, here: https://www.norwegian.com/globalasse...esentation.pdf
Here's a few bullet points from page 22:
Key dates:
Key terms of the rights issue to be set: On or about 18 February 2019
EGM: 19 February 2019
Shares traded exclusive of subscription rights: On or about 20 February 2019
Subscription period: Expected 22 February 2019 - 8 March 2019
Final result/allocation: On or about 11 March 2019
EGM = Extraordinary General Meeting … this is for the secondary offering (rights issue)
On the earnings call, they said they had commitments for 1 Bn of the 3 Bn offering. However, the stock has dropped (as of today) 25% since the earnings call. With each drop, that means they have to issue even more shares to net 3B NOK. This is looking like a massive stock dilution. It should be noted that they did this same thing - issuing more stock - in 2018.
As far as the secondary offering, page 22 of the Q4 presentation has the details, here: https://www.norwegian.com/globalasse...esentation.pdf
Here's a few bullet points from page 22:
Key dates:
Key terms of the rights issue to be set: On or about 18 February 2019
EGM: 19 February 2019
Shares traded exclusive of subscription rights: On or about 20 February 2019
Subscription period: Expected 22 February 2019 - 8 March 2019
Final result/allocation: On or about 11 March 2019
EGM = Extraordinary General Meeting … this is for the secondary offering (rights issue)
On the earnings call, they said they had commitments for 1 Bn of the 3 Bn offering. However, the stock has dropped (as of today) 25% since the earnings call. With each drop, that means they have to issue even more shares to net 3B NOK. This is looking like a massive stock dilution. It should be noted that they did this same thing - issuing more stock - in 2018.
Feb 19, 2019, 1:13 pm
#75
Join Date: Jul 2001
Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star
Posts: 5,536
So I'm no expert on European financial markets, but it does seem hard to believe you could get folks to buy into this secondary offering. I mean, let's look at reality. Their business model doesn't work. Who's going to invest in that? This is not a situation where "giving them a little more time" could work. I would think they'd need a radical change in that model for investors to have enough hope to invest.
I see a reverse stock split in Norwegian's future as a prelude to another secondary stock offering.