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dismissed a suggestion that he might sell Delta’s stake, saying: “I have no interest in trying to sell at this point or in the future.” Virgin Atlantic was told last


week to resubmit a £500 million bid for UK government aid amid reports that the Treasury was “unimpressed” and not convinced the carrier had “exhausted other options”. UK chancellor Rishi Sunak


has told airlines he will consider “bespoke support” for individual carriers only as “a last resort”. Virgin denied it needed a


bailout by the end of May to survive. The carrier’s transatlantic


joint-venture partner Air France- KLM confirmed it would receive €3 billion in loans from the French government and another €4 billion in state-guaranteed funds from a consortium of banks, while the Dutch government confirmed it would provide between €2 billion and €4 billion in aid to KLM. The aid remains subject


to approval by the European Commission. Air France-KLM chief executive Benjamin Smith warned the aid was “not a blank cheque” and would require cost-cutting. In Germany, the Berlin


government and state of Hesse agreed to loan Condor €550 million on Monday after Polish flag-carrier Lot pulled out of a deal to buy Condor. Almost half the financing is required to repay an earlier loan Condor received last October following the collapse of Thomas Cook. Federal minister for


economic affairs Peter Altmaier said: “The company was operationally healthy and profitable in normal times.”


Norwegian Air banks on $1.2bn deal and state aid


Ian Taylor


Norwegian Air could run out of cash by mid-May unless creditors and shareholders approve a high-risk rescue plan, the carrier warned on Monday. Creditors including aircraft


leasing companies and bondholders were due to decide on a $1.2 billion debt-for-equity swap on Thursday (April 30). Shareholders are due to follow with a vote on May 4 on a dilution in the value of their shares to just 5%.


Favourable results on both should


see Norwegian secure NOK3 billion (£240 million) in state aid in Norway. Norwegian warned it was “critical


to get access to the state aid package by mid-May before the company runs out of cash”. However, a bailout would


only be enough to shore up the carrier temporarily. The debt-for- equity swap would leave aircraft leasing companies holding 53% of Norwegian Air in return for more than $500 million of the $3.1 billion they are owed. Bondholders would


own almost 42% of the carrier in return for $350 million in debt. Current shareholders would be


left with a little over 5% ahead of a another rights issue which would further dilute their remaining holdings. The carrier conceded they would be “wiped out”. Norwegian also wants its lease


payments reduced by at least $4.2 million a month and is seeking to delay interest and other payments to creditors until July 2021. Some of the bonds are secured against landing slots at Gatwick which Norwegian will lose without bondholders’ agreement. The carrier began the year with


more than £4.8 billion in debt. It warned on Monday that most of


its fleet is likely to remain grounded for at least a year, leaving only seven aircraft flying in Norway. If it survives, the carrier said it


Norwegian needs debt-for-equity deal to secure state aid


would cut its fleet by about a third once the crisis is over. Norwegian Air declared four of its Scandinavian subsidiaries bankrupt last week.


Attractions giant Merlin targets €500m funding


Attractions group Merlin Entertainments was hoping to raise €500 million from bond investors and to tap government support schemes this week only months after a £6 billion buyout. Merlin, owner of 130 attractions


including Legoland and Madame Tussauds, was acquired in November by a consortium led by


32 30 APRIL 2020


Danish business Kirkbi, private equity giant Blackstone and a Canadian pension fund. Merlin announced the


fundraising last week. It noted all but nine of its attractions are closed and warned prolonged closures could cast “material uncertainty” over its ability to continue trading. The company had £520 million


in cash available at the end of March with another £30 million in a revolving credit facility. Its “operational cash outflow” remains about £50 million a month. The group reported: “Although a small number of our attractions


Legoland Windsor


have reopened in China, we cannot predict when each of our attractions will be allowed to reopen. Even when they do, social distancing and other policies may impact their operation and consumer appeal.”


travelweekly.co.uk


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