Icelandair Postpones Offering of New Shares

Icelandair Group’s public offering has been postponed until August, mbl.is reports. The company had planned to complete negotiations with stakeholders yesterday to be able to start the offering of new shares and complete the company’s financial restructuring, but this did not go through.

Negotiations with some key parties are ongoing, among them aircraft lessors and a credit card acquirer, according to a statement from the company. Negotiations with Boeing regarding further compensation in connection with the grounding of 737 MAX jets are in process as well.

According to Morgunblaðið’s sources, negotiations with Íslandsbanki and Landsbanki, as well as representatives of the state treasury, are going well. They aim at having the banks convert loans to the company into shares, and for the state treasury to guarantee a line of credit when the need arises. The same sources state that negotiations with CIT Bank are proceeding well.

Icelandair’s largest stakeholders are Icelandic pension funds. For several weeks, they’ve been awaiting information about the airline’s future plans. Their participation in the public offering will depend on their and their consultants’ assessment of those plans.

“Conditioned that fully documented agreements will be completed with the remaining stakeholders in July, the Company intends to initiate the proposed offering of new shares in August,” Icelandair Group’s statement reads. “However, in case these negotiations will be unsuccessful, the Company will need to initiate a new phase of its restructuring process without the government guaranteed credit facility. Such process might extend for up to 12 months and the Company would be required to seek deferral of any payments to financial creditors during such process.

The cash position of the Company is currently around USD 150 million which is in excess of three months fixed operational cost in the current environment,” the statement concludes.