The Norwegian must agree to mortgage lenders around the world within 60 days – E24



Norwegian has until January 18 to agree with the creditors who have a mortgage on the fleet. If this is not possible, Norwegian is obliged to hand over the aircraft to the creditors.

This plane, a Boeing 737 with women’s rights activist Fredrikke Marie Qvam as its tail hero, is owned by the most aggressive of many Norwegian creditors to date.

HANS OLAV NYBORG

Published:,

In just over a week, an Irish judge will decide on Monday whether Norwegian can replace the current temporary Irish bankruptcy protection with a more permanent protection.

In that case, the Norwegian parent company and five Irish subsidiaries are protected against bankruptcy for up to 150 days.

But if Norwegian is allowed to keep the plane they plan to use in the future for operations, the problems must be solved long before that.

Within 60 days of Norwegian receiving its temporary protection, they must agree with creditors who have a mortgage on the current fleet of 140 aircraft. The deadline is January 18.

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CEO Jacob Schram (left) and Geir Karlsen must reach agreement within 60 days on leasing companies and banks around the world. 20 days less than Phileas Fogg spent on his journey.

Håkon Mosvold Larsen

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Convention bound

The explanation is that both Norway and Ireland are parties to something like the Cape Town Convention.

It is an international agreement from 2001. It regulates the rights that mortgage holders have.

This time bomb is mentioned in a report recently presented to an Irish judge by an Irish partner in the Deloitte accounting firm.

According to Deloitte, the Norwegian and a so-called “examiner” appointed by the court must within 60 days:

  • Find out more about current leases and mortgage-backed bank loans
  • Agree with the lease companies and banks with mortgages about the future.

If not, Norwegian is obliged to return the aircraft to the creditors.

But if they accomplish this, they will have a better time to negotiate with all of their other creditors.

A hearing on December 7 in this Dublin courthouse will decide whether the Norwegian parent company and its five Irish subsidiaries can remain under bankruptcy protection.

Courts

Has 140 aircraft in total

Norwegian’s fleet consists of 85 leased aircraft, of which 55 are owned. The aircraft owned are all mortgaged.

Fortunately for Norwegian management, they didn’t start this financial record attempt in 60 days with cold engines.

Norwegian has continuously informed leasing companies and banks for some time that it may be necessary to file for Irish bankruptcy protection.

Norwegian doesn’t want to keep all of today’s planes. But current management will try to determine which one to fly further with.

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All Norwegian company names in Ireland

The Irish subsidiaries, now under temporary bankruptcy protection, lease a total of 72 aircraft. They also own several aircraft.

The reason why the three Irish subsidiaries Drammensfjorden, Lysakerfjorden and Torskefjorden were selected to seek protection was that these three companies have more than one so-called creditor class.

This means that these three companies both lease and own aircraft. And so they have different types of creditors.

Only companies with different types of creditors can file for bankruptcy protection under Irish law.

The second plane from Norway’s most aggressive creditor features Swedish opera singer Kristina Nilsson as its tail hero. Both devices have been rented out since 2013.

Wikimedia Commons

Aggressive American

So far it is known that three creditors have attacked Norwegian.

The most aggressive is the American leasing company Aviation Capital Group. They have leased two aircraft to the subsidiary Lysakerfjorden.

Aviation Capital would not participate in the refinancing of Norwegian in May. And Aviation Capital then sued Lysakerfjorden in an English court in July.

On November 6, Lysakerfjorden was ordered to pay NOK 57 million in default interest. But now Lysakerfjorden is under temporary Irish protection.

If extended from Monday, December 7, Aviation Capital is unlikely to be able to win with its claim.

In AKO Capital, Irish Ryanair Nicolai Tangen was the stock of choice. He now heads the Oil Fund, which is a (more passive) shareholder in the parent company of Norway’s most aggressive creditor.

Kjetil Malkenes Hovland / E24

“The Oil Fund attacks” Noor

Because if Lysakerfjorden agrees with the other leasing companies, the American company must also accept the same conditions.

Aviation Capital is owned by the Japanese financial giant Tokyo Century Corporation. The largest owner of this company is once again one of Japan’s largest trading companies. It’s called ITOCHU Corp.

No disclosure is given to the readers of E24 to guess who is the great owner of both Japanese giants. It’s Norwegian, of course The oil fund.

At the beginning of 2020, the Petroleum Fund owned approximately 1.25 percent of the shares in each of them.

This is what capitalism is like: Norwegian Norwegian seeks protection from Irish bankruptcy after being attacked by a US company under British law.

It is once again fully owned by a Japanese financial company, of which the Norwegian Petroleum Fund is one of the largest shareholders.

Then the ring is probably over.

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