In what has been a turbulent week for Icelandic airline WOW Air, a statement was made today outlining that essential steps have been made to secure the company’s financial future.
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An official statement on the company’s website says,
“Bondholders have formally approved to convert their bonds into equity and formal discussions with investors have commenced to fund the company. This is an important milestone in financially restructuring the company and secure the long-term sustainability of WOW air.”
This news means that all creditors of WOW air except Isavia have agreed to convert ISK 15 billion (USD 130 million) into a 49 per cent share in the company.
This announcement has come after CEO of WOW, Skúli Mogensen conducted three telephone conferences with creditors over the weekend in an effort to save the company from bankruptcy.
Read more about about how WOW Air reached this point here.
This news may look positive for the low-cost airline; however, WOW still owes airport management company Isavia over 1 billion króna (USD 8.6 million). They would still be an important figure in the future of WOW as they are the rental agents for the aircraft WOW uses.
At this point, Skúli will continue to own a large portion of the company and is still the CEO, but it will be up to the new owners to decide what his future role will be.
WOW is also attempting to raise a further ISK 5 billion (USD 43 million) in share capital. Those who are involved have said that finding the right shareholders could take some time and that people still have faith in the company which should lead to the debt converted into capital returning to the new shareholders within a few years.
This is welcome news for those planning trips to Iceland in the future as well as many Icelanders abroad who were unsure if their flights home would still be in effect.