LONDON – It’s deadline day today and tomorrow for Norwegian carrier Flyr as they have to raise 430 million NOK by Tuesday in order to remain afloat.
As the Oslo Stock Exchange continues to increase in size, Flyr’s stock is declining.
At the start of trading, the carrier’s share value dropped down to 23%, and at the time of writing, it is currently 16% down.
Flyr has been suffering substantial losses, with their third-quarter results showing that they had a net loss of 452.9m NOK and an operating loss of NOK 231.7m from revenues of 610.4m NOK.
In conversion terms, the 430 million NOK is around 40-45 million EUR that they have to find by the close of play today.
It is understood that the issue price for shares is at NOK 0.01.
The CEO Tonke Wikstrom Frislid said the following on this at the carrier’s investor conference:
“The price per share has been set low to mark that this is a restart”.
In order to save money also, the airline is going to lay off around half of its company employees, with Frislid saying that the carrier is doing this with a “heavy heart”.
Funding Needed to Survive The Winter…
The 430 million NOK figure has been established based on the cash balance of the carrier, ending on September 30, which was 154 million NOK, whilst equity was sitting at -450m NOK.
Such funding will be utilized to help get the carrier through the Winter 2022/23 season, which is normally a volatile time for the airline industry anyway.
The founder and chairman of Flyr, Erik Braathen, has said he will pre-subscribe 10 million NOK in the private placement and also said the following on this:
“By implementing these measures, we will be well positioned to step up with full force for the coming spring and summer”.
Flyr also plans to propose a subsequent repair issue to existing shareholders who are unable to participate in the directed issue, meaning this could raise another 100 million NOK.
Could The Norwegian Government Get Involved?
At this present time, the Norwegian Government hasn’t indicated whether they would provide a bailout to Flyr in the event that not enough funding is secured.
However, as we come out of the COVID-19 pandemic, it’s unlikely that this would happen, given the fact that most carriers in the region are on the path to recovery.
Either way, staff at the airline do remain optimistic, with some saying to AviationSource that they aren’t too worried about the prospects of losing their jobs potentially.
They do remain confident in the airline to secure the funding it needs to continue operations.
All eyes are now on Flyr to establish whether they can get the funding in time for the deadline tomorrow.
If they don’t, then this will be another airline to be chopped out of the industry, which would be substantial news for Norwegian and Norse Atlantic Airways moving forward.
Even so, the carrier’s meteoric rise to fame has been something incredible in recent years. They are more than capable of turning this around and carrying on with what they intend to do in this sector.